Reasoning & Decision-Making

Concept

A mental grouping of objects, events, or people that share similarities

Category

A classification of concepts based on shared characteristics

Prototype Theory

The idea that we categorize things by comparing them to the best example of a category

Prototype

The mental image or best example of a category, such as a typical dog

Graded Membership

Some objects are considered better examples of a category than others

Hierarchical Organization of Knowledge

Organizing information from broad categories into smaller, more specific groups

Visual Imagery

Creating mental pictures of objects or experiences

Mental Rotation

Imagining an object rotating in your mind to see it from different angles

Formal Reasoning

Logical thinking that follows established rules and usually has one correct answer

Everyday Reasoning

Thinking used in real-life situations that may have multiple possible solutions

Deductive Reasoning

Using a general rule to reach a specific conclusion

Inductive Reasoning

Using specific observations to form a general conclusion

Syllogistic Reasoning

Using two statements to reach a logical conclusion

Judgment

The process of drawing conclusions based on evidence or experience

Premise

A statement or piece of information used to support a conclusion

Normative Theories

Explain how people should make decisions to achieve the best outcome

Descriptive Theories

Explain how people actually make decisions and why they make mistakes

Prescriptive Theories

Focus on helping people make better decisions by reducing biases and errors

Utility Maximization

Choosing the option that provides the greatest benefit or gain

Heuristics

Mental shortcuts that help us make quick decisions but can sometimes lead to mistakes

Cognitive Bias

A systematic error in thinking that affects judgments and decisions

Anchoring Bias

Relying too heavily on the first number or piece of information presented

Availability Heuristic

Judging how common something is based on how easily examples come to mind

Attribute Substitution

Replacing a difficult question with an easier one when making a judgment

Representativeness Heuristic

Judging something based on how closely it resembles a familiar example

Gambler's Fallacy

Believing a random event is more likely because it hasn't happened recently

Base-Rate Information

Information about how frequently something occurs in general

Base-Rate Neglect

Ignoring general statistics and focusing on specific details instead

Vividness Heuristic

Giving more importance to memorable or emotionally striking information when making judgments

Hindsight Bias

Believing you knew something would happen after it has already happened

Overconfidence Bias

Being more confident in your knowledge or judgments than you should be

Confirmation Bias

Looking for information that supports your beliefs while ignoring evidence that challenges them

Illusion of Covariation

Believing two things are related when there is little or no actual relationship

Dual-Process Model

The idea that thinking involves two systems: fast, automatic thinking and slow, deliberate thinking

System 1 Thinking

Fast, automatic thinking that requires little effort.

System 2 Thinking

Slow, deliberate thinking that requires attention and effort

Prospect Theory

A theory describing how people make decisions involving potential gains and losses

Risk-Seeking

Preferring a risky option over a safer one

Risk-Averse

Preferring a safer option over a risky one