Cognition and Language Week 10: Decision-Making and Judgement Bias

150 flashcards based on the lecture notes 'Cognition and Language (CaL) Week 10: Decision-Making and Judgement Bias', covering utility theory, heuristics, framing effects, and prospect theory.

What is the primary topic of the Week 10 lecture in the Cognition and Language unit?

Decision-Making and Judgement Bias

Who is the lecturer for the session on Decision-Making and Judgement Bias?

Kevin Thomas

What is the attendance check code for the lecture session?

$$823367$$

According to the lecture, what are the two main components of a decision task?

Costs (cons) and benefits (pros)

How are 'costs' defined in the context of decision-making?

Factors that take us away from our goal

How are 'benefits' defined in the context of decision-making?

Factors that take us towards our goal

What is the expected value of a $50\%$ chance of getting $£20$ and a $50\%$ chance of getting nothing?

$$£10$$

In decision-making literature, what is another term for 'value'?

Utility

Why is value considered too subjective to be measured solely in money?

Because everything has personal value that differs among individuals

According to logical principles, how should one handle a decision task?

Weigh-up (weight) benefits against costs to maximise value

List three positive attributes ('FOR') identified for going away to university.

Make new friends, learn new things, move to a better place, have more freedom, have more fun, get a better job

List three negative attributes ('AGAINST') identified for going away to university.

Lack of money, incurring debt, losing contact with friends, missing family, feeling lonely, unfamiliar surroundings

In the weighting value model for university, what is the value range assigned to 'FOR' attributes?

$1$ to $10$

In the weighting value model for university, what is the value range assigned to 'AGAINST' attributes?

$-1$ to $-10$

On what basis is a decision made in the simple weighting value model?

The highest absolute ($+\text{ or } -$) value

In the combined weighting model, how is a decision based?

The highest absolute combination of estimated probability ($0$-$1$) and value weighting

What is the calculation for the 'FOR' value in the university example?

$$(9 \times 0.6) + (7 \times 0.7) = +10.3$$

What is the calculation for the 'AGAINST' value in the university example?

$$(-5 \times 0.9) + (-4 \times 0.8) = -7.7$$

What does 'Subjective Expected Utility (SEU)' theory represent?

A normative theory describing how decisions should (ought to) be made

In SEU theory, what does 'Expected' refer to?

Trying to imagine decision outcomes and their consequences in advance

What does 'Utility' refer to in SEU theory?

The usefulness or value of things

What is the formula for the Subjective Expected Utility (SEU) calculation?

$$P(\text{attribute } 1) \times U(\text{attribute } 1) + P(\text{attribute } 2) \times U(\text{attribute } 2)\dots$$

In the SEU formula, what do 'P' and 'U' represent?

$P = \text{probability}$; $U = \text{utility}$

What kind of orientation does SEU theory have?

Mathematically-orientated

What are 'trade-offs' in utility theory?

Choosing an option based on attributes best suited to needs given constraints

What is the primary goal of decision-making according to utility theory?

To maximise utility

How is 'utility' defined in the context of the decision-maker's goal?

What is best for the decision-maker or an outcome that 'ticks enough boxes'

Is Subjective Expected Utility theory considered psychologically-plausible?

No

Define the principle of 'descriptive invariance'.

The description of decision task options should not influence the option chosen

According to 'descriptive invariance', what determines choice?

Utility of options, not their description

Who conducted the seminal study in $1981$ on 'descriptive invariance'?

Tversky and Kahneman

What was the core difference between the two versions of the scenario in the Tversky & Kahneman ($1981$) study?

One version emphasised loss, while the other version emphasised gain

In the Asian disease scenario, how many people were expected to die if no action was taken?

$600$ people

In the 'gain' version of the Asian disease study, what was the safe option (Treatment 1)?

$200$ people will be saved

In the 'gain' version of the Asian disease study, what was the risky option (Treatment 2)?

$1$ in $3$ chance $600$ saved and $2$ in $3$ chance no-one saved

In the 'loss' version of the Asian disease study, what was the safe option (Treatment 1)?

$400$ people will die

In the 'loss' version of the Asian disease study, what was the risky option (Treatment 2)?

$1$ in $3$ chance no-one dies and $2$ in $3$ chance $600$ die

What percentage of participants chose the safe option in the 'gain' version of the disease study?

$$72\%$$

What percentage of participants chose the risky option in the 'gain' version of the disease study?

$$28\%$$

What percentage of participants chose the safe option in the 'loss' version of the disease study?

$$22\%$$

What percentage of participants chose the risky option in the 'loss' version of the disease study?

$$78\%$$

What do the results of the Asian disease study indicate about the 'descriptive invariance' principle?

The principle is violated because choices differed based on framing despite identical expected utility

Define the 'Framing effect'.

The phenomenon where decisions are affected by the presentation or 'framing' of options

How do decisions change for tasks 'framed' in terms of loss?

Decisions become more risky (risk-seeking)

How do decisions change for tasks 'framed' in terms of gain?

Decisions become less risky (risk-averse)

In the context of the framing effect, what does a positive frame lead to?

Risk-aversion

What is a 'negative frame' associated with in decision-making?

Risk-seeking

The framing effect is a violation of which theory's principle?

The 'invariance principle' of utility theory (UT)

What is the difference between forced-choice risk decisions and judgement tasks?

Judgement tasks do not involve forced-choice decision-making

According to Thomas et al. ($2011$), when were intentions to reduce skin cancer risk greater?

When info emphasised the dangers of not protecting skin (negative framing)

What was the findings of O’Keefe and Jensen ($2007$) regarding message framing?

Positive framing is generally more effective, but the type of health issue affects which frame works best

Who proposed Prospect Theory in $1979$?

Kahneman and Tversky

Is Prospect Theory a descriptive or normative theory?

Descriptive theory

What does Prospect Theory explain?

How decisions are made and how they deviate from normative standards

On what basis are 'prospects' evaluated according to Prospect Theory?

Expected subjective value (utility) of outcomes, rather than expected monetary value

Who originally suggested in $1738$ that outcomes are evaluated by subjective utility?

Bernoulli

According to Prospect Theory paradigm studies, which option is chosen more often between a guaranteed $£400$ and a $50\%$ chance of reaching $£500$ from $£300$?

The guaranteed option (risk-averse when gains emphasised)

Identify three names for theories focused on rational decision-making criteria.

Utility theory (UT), subjective expected utility (SEU) theory, or expected utility theory (EUT)

Which theory describes decision-making processes and explains non-rational phenomena like the 'framing effect'?

Prospect theory

In MCQ 1 from the lecture, which problem was used to initially identify the 'framing effect'?

Asian Disease Problem

What are cognitive heuristics?

Reflexive mental shortcuts used to simplify complex cognition and increase speed

What is a potential downside of using cognitive heuristics?

They can lead to bias or error because not all relevant information is considered

Provide an example of a bias caused by a heuristic from the lecture.

Buying an unreliable car because its appearance is more influential than its mechanical attributes

When are heuristics typically used?

Under 'uncertain conditions' where outcomes are unknown

Identify three causes for the use of heuristics.

Cognitive limitations (working memory/attention), external constraints (limited time), and motivational constraints

How can relying on easy-to-retrieve memory lead to bias in social situations?

Using stereotypes rather than taking time to learn about a colleague's background

Whose approach challenged the dominance of normative models of thinking in the $1970$s and $80$s?

Kahneman and Tversky

Kahneman and Tversky proposed that thinking under uncertainty is due to what?

A few simplifying mental strategies (shortcuts)

In what year did Daniel Kahneman win the Nobel Prize for Economics?

$$2002$$

List the three major cognitive heuristics identified by Kahneman and Tversky.

Availability, Representativeness, and Anchoring and Adjustment

Define the 'Availability' heuristic.

Judging something based on ease of recall or mental simulation of consistent info

Define the 'Representativeness' heuristic.

Judgements based on similarity between seemingly-related things

Define the 'Anchoring and Adjustment' heuristic.

Judgements based on numerical information where bias occurs from insufficient adjustment from an initial 'anchor'

In the availability study regarding house fires, what served as the 'memory-prime'?

Reading a newspaper article about a house fire

In the study by Tversky & Kahneman ($1982$), why did people wrongly judge that more words start with 'R' than have it as the third letter?

Easier to think of examples starting with 'R' (greater cognitive availability)

What is the actual ratio of words with 'r' as the third letter compared to words starting with 'R' in English?

$3 \times$ as many words have 'r' as the third letter

Representativeness heuristic often leads to the violation of which normative principle?

Bayes' theorem

In the 'Taxi cab' study ($1972$), what was the base-rate percentage for blue taxis?

$$15\%$$

In the 'Taxi cab' study ($1972$), what was the base-rate percentage for green taxis?

$$85\%$$

What was the witness's accuracy rate in the 'Taxi cab' study?

$$80\%$$

What data did participants ignore in the 'Taxi cab' study during their judgements?

The base-rate data (proportions of taxis in the city)

Explain the 'Conjunction fallacy'.

A thinking error where two or more things are judged as more likely to occur together than each thing separately

The conjunction fallacy violates which rule of probability theory?

The 'extension rule'

According to the 'extension rule', what must the probability of two events occurring together be?

Less likely than each event occurring on its own

In the BU student example, if $2\%$ speak Icelandic, what is the chance of meeting a student who speaks Icelandic?

$2$ in $100$

Whose characteristics were used in the $1983$ study testing the conjunction fallacy?

'Linda'

In the 'Linda problem', what did most participants judge more likely than Linda being a bank teller?

Linda being a 'feminist bank teller'

Which study used a 'random' number to influence judgements of African nations in the UN?

'Wheel of fortune' study ($1974$)

In the Wheel of Fortune study, what was the 'low anchor' value?

$$1$$

In the Wheel of Fortune study, what was the 'high anchor' value?

$$64$$

What happened to judgements in the low-anchor condition of the Wheel of Fortune study?

Underestimation

What happened to judgements in the high-anchor condition of the Wheel of Fortune study?

Overestimation

Why are judgements biased in the direction of the anchor in the anchoring heuristic?

Because of insufficient adjustment from the anchor

Define the 'Overconfidence' bias.

The tendency to overestimate one's ability, often in probabilistic reasoning or future events

Define the 'Over-optimism' bias.

The tendency to underestimate time needed (e.g., for an essay)

What is the common cause for both overconfidence and over-optimism?

Neglect of base-rate data

What is 'case-specific reasoning'?

Judging based on a single instance or example

Define the 'Planning fallacy' bias.

Underestimating future task duration despite knowing that previous tasks overran

What factors contribute to the planning fallacy?

Neglect of base-rate data and focusing on aspects of the current task

What can reduce the underestimation of the planning fallacy?

Prior task experience