(L1-2) CH12: Decision Making and Reasoning

Judgement and decision making

Used to select from among choices or to evaluate opportunities

Goal of reasoning

To draw conclusions, either deductively from principles or inductively from evidence

Classical Decision Theory

The earliest models of how people make decisions

1. The model of economic man and woman

2. Subjective expected utility theory

The Model of Economic Man and Woman

Assumed three things:

1. Decision makers are fully informed regarding all possible options for their decisions and of all possible outcomes of their decision options

2. They are infinitely sensitive to the subtle distinctions among decision options

3. They are fully rational in regard to their choice of options (people make their choices to maximise something of value, whatever it may be)

Prevails in many theories of economics

Ratings and weightings are objective rather than subjective

Subjective Expected Utility Theory

When people make decisions, they will seek to maximise pleasure (positive utility) and minimise pain (negative utility)

By calculating two things:

1. Subjective utility

2. Subjective probability

Ratings and weightings are subjective rather than objective

Subjective utility

A calculation based on the individual’s judged weightings of utility (value) rather than on objective criteria

Subjective probability

A calculation based on the individual’s estimates of likelihood, rather than on objective statistical computations

Heuristics

Mental shortcuts that lighten the cognitive load of making decisions (but also allows for greater chance of error)

Helps us make a decision within a reasonable time frame by reducing the available information to a manageable amount

1. Satisficing

2. Elimination by Aspects

We may use some elements of elimination by aspects/satisficing to narrow the range of options to just a few. Then we use more thorough and careful strategies

3. Using probabilities to make decisions

4. Representativeness

5. Availability

6. Anchoring and Adjustment

7. Framing

8. Take-the-best

9. Fast-and-frugal (FFH)

Bounded rationality

We are rational, but within limits

Humans do not always make ideal decisions and we usually include subjective considerations in our decisions

Satisficing

Consider options one by one, then select an option as soon as we find one that is satisfactory/just good enough to meet minimum level of acceptability

Using any strategy that works to accomplish a goal, even if it is not the most effective strategy

When limited working memory resources are available

Satisficers and maximisers

Two groups that people generally fall into with respect to decision making

Both may end up making good choices

Satisficers

People who consider options until they have found one that is good enough for them

Maximisers

People who try to consider every single option before choosing the best one

Tend to:

• End up less happy with their choices

• Be more overconfident in their decisions

Elimination by Aspects

Eliminate alternatives by focusing on aspects of each alternative, one at a time, instead of mentally manipulating all the weighted attributes of all the available options

Set a criterion value and weed out additional alternatives —> Sequential process of elimination of options by considering a series of aspects until a single option remains

When we have more alternatives than we can consider in the time available

Using probabilities to make decisions

One of the key ways in which we use mental shortcuts that centers on our estimations of probability

Formulae can be quite complex but such calculations are essential to evaluating scientific hypotheses, forming realistic medical diagnoses etc.

Conditional probability

The likelihood of one event, given another

E.g. The likelihood of receiving an A for a cog psych course, given that you receive an A on the final exam

Formula: Bayes’s theorem (not used in everyday reasoning)

Bayes’s theorem

The formula for calculating conditional probabilities in light of evidence

Representativeness Heuristic

Judge the probability of an uncertain event according to the following:

1. How obviously it is similar to the population from which it is derived

2. The degree to which it reflects the salient features of the process by which it is generated

E.g. if you expect a sequence to be random, you tend to view as more likely a sequence that ‘looks random’

Reasons that people often use this:

1. Frequently reason ITO whether something appears to represent a set of accidental occurrences, rather than actually considering the true likelihood of a given chance occurrence

2. Mistakenly believe that small samples resemble in all respects the whole population from which the sample is drawn

3. Fail to understand the concept of base rates

Used more frequently when we are highly aware of anecdotal evidence based on a very small sample of the population (“man who” argument)

“Man who” argument

Reliance on anecdotal evidence

E.g. When presented with statistics, we may refute those data with our own observations

Base rate

The prevalence of an event or characteristic within its population of events or characteristics

Important to effective judgement and decision making

Availability Heuristic

Make judgements on the basis of how easily we can call to mind what we perceive as relevant instances of a phenomenon

Used more often when it confirms their beliefs about themselves

Anchoring and Adjustment Heuristic

People adjust their evaluations of things by means of certain reference points called end anchors

The adjustment people make in response to an anchor is bigger when the anchor is rounded than when it seems to be a precise value

E.g. When the price of a TV set is given as $3,000, people adjust their estimate of its production costs more than when the price is given as $2,991

Framing effects

The way that the options are presented influences the selection of an option (even when the actual outcomes of the choices are the same)

• Present ITO gains —> adoption of risk-aversion strategy

• Present ITO losses —> adoption of risk-taking strategy

We tend to choose options offering a small but certain gain (risk aversion) rather than a larger but uncertain gain, unless the uncertain gain is either tremendously greater or only modestly less than certain

We tend to choose options offering a large but uncertain loss rather than a smaller but certain loss, unless the uncertain loss is either tremendously greater or only modestly less than certain

Effectiveness

• Less persuasive when they come from sources of low credibility

• Whether our friends support/discourage a certain option

Take-the-best heuristic

Simple heuristic: Identify the single most important criterion to you when making a decision & make your choice on the basis of that attribute

Can produce better decisions than more complicated heuristics

Belongs to a class of heuristics called fast-and-frugal heuristics (FFH)

Fast-and-frugal heuristics

Based on a small fraction of information, and decisions using the heuristics are made rapidly

Set a standard of rationality that considers constraints, including time, information, and cognitive capacity

Consider the lack of optimum solutions and environments in which the decision is taking place

Provide a good description of decision making during sports

Biases

Illusory correlation

Overconfidence

Hindsight bias

Illusory Correlation

We are predisposed to see particular events (cause-effect) or attributes (stereotypes) and categories as going together, even when they do not

The instances in which people show those characteristics are more likely to be available in memory and to be recalled more easily than are instances that contradict our biased expectations

Overconfidence

An individual’s overvaluation of his/her own skills, knowledge, or judgement

People tend to overestimate the accuracy of their judgements

• May not realise how little they know

• May not realise that their information comes from unreliable sources

People tend to be biased in favour of their own attitudes and beliefs

• Myside bias

Explanations

• We prefer not to think about being wrong (Fischhoff, 1988)

Myside bias

People may pay particular attention to news articles and facts that confirm their beliefs, generate evidence and test their ideas in a way to conform to their beliefs

Little relation to intelligence

Hindsight bias

When we look at a situation retrospectively, and we believe we easily could have seen in advance all the signs and events that led up to a particular outcome

A form of memory distortion: people misremember their original judgement of a situation in the face of the outcome of that situation

Negatively correlated with working memory capacity —> people with poorer working-memory capacity are more susceptible

Hinders learning because it impairs one’s ability to compare one’s expectations with the outcome

Experience does not reduce bias

Fallacies

Erroneous reasoning

1. Gambler’s fallacy

2. Hot hand effect

3. Conjunction fallacy

4. Sunk Cost fallacy

Gambler’s fallacy

A mistaken belief that the probability of a given random event is influenced by previous random events

Example of the representative heuristic: one believes that the pattern representative of past events is now likely to change

More likely in men

Hot hand effect

A belief that a certain course of events will continue

Conjunction fallacy

An individual gives a higher estimate for a subset of events than for the larger set of events containing the given subset

May be due to availability heuristic/representativeness heuristic during probabilistic reasoning (less likely when questions phrased ITO frequencies vs percentages)

People who subscribe to conspiracy theories/believe in the paranormal tend to be more susceptible

Sunk cost fallacy

The decision to continue to invest in something simply because one has invested in it before and one hopes to recover one’s investment

Opportunity costs

The prices paid for availing oneself of certain opportunities

Important to take into account when judgements are made

Naturalistic decision making

A field of study that is based on decision making in natural environments

Developed due to criticism: decision making is a complex process that cannot be reproduced adequately in the lab because real decisions are frequently made in high-stakes situations

Benefits of group decisions

Can enhance the effectiveness of decision making

• Benefit from the expertise of each of the members

• Increase in resources and ideas

• Improved group memory over individual memory

Characteristics of successful groups

1. The group is small

2. It has open communication

3. Members share a common mindset

4. Members identify with the group

5. Members agree on acceptable group behaviour

In juries, members share more information during decision making when the group is made up of diverse members

Groupthink

A phenomenon characterised by premature decision making that is generally the result of group members attempting to avoid conflict

Frequently results in suboptimal decision making that avoids nontraditional ideas

Janis (1971) conditions that lead to it:

1. An isolated, cohesive and homogeneous group is empowered to make decisions

2. Objective and impartial leadership is absent, within the group or outside it; and

3. High levels of stress impinge on the group decision making process

Another cause is anxiety —> less likely to explore new options and will likely try to avoid further conflict

Janis (1971): Six symptoms

1. Closed mindedness

2. Rationalisation

3. Squelching of dissent

4. Formation of a ‘mindguard’

5. Feeling invulnerable

6. Feeling unanimous

Due to:

• Examining alternatives insufficiently

• Examining risks inadequately

• Seeking information about alternatives incompletely

Janis (1971): Antidotes

• Leader should encourage constructive criticism, be impartial, and ensure that members seek input from people outside the group

• Group should form subgroups that meet separately to consider alternative solutions to a single problem

• Leader takes responsibility for preventing spurious conformity to a group norm

Closed mindedness

The group is not open to alternative ideasq

Rationalisation

The group goes to great lengths to justify both the process and the product of its decision making, distorting reality where necessary in order to be persuasive

Squelching of dissent

Those who disagree with the group are ignored, criticised, or even ostracised

Formation of a ‘mindguard’

One person appoints himself/herself the keeper of the group norm and ensures that people stay in line

Feeling invulnerable

The group believes that it must be right, given the intelligence of its members and the information available to them

Feeling unanimous

Members believe that everyone unanimously shares the opinions expressed by the group

Neuroscience of decision making

Prefrontal cortex & anterior cingulate cortex active during decision-making process

Activation of parietal regions of brain in monkeys

The amount of gain associated with a decision affects the amount of activation observed in the parietal regions

The ultimatum game

Frequently used by neuroscientists to study decision making

One player (proposer) makes an offer to the second player (responder) on how to split a certain amount of money. The responder can either accept the offer, in which case each player receives the amount suggested by proposer, or reject the offer, in which case neither of the two players receives any money

Classical decision theory suggests that the responder should accept any offer because getting less money is still better than getting no money at all.

When people get an offer that splits the money in an unfair way, responders often reject the offer —> likely due to pps dissatisfaction with their feeling that they have been treated unfairly/cheated

Anterior insula

Involved when people are confronted with unfair offers from others

Activated no matter whether the unfair offer was presented to the responder/third person

Middle anterior portion of medial prefrontal cortex

Activated only when the unfair offer was directed at the responder themselves

Prefrontal cortex

Activated in such tasks no matter whether the responder accepts or rejects offers, indicating that it is involved on a more general basis in making decisions

Anterior cingulate cortex

Involved in the consideration of potential rewards

• Decreased activation in drug abusers

Involved in the comparison and weighing of possible solutions

• Suboptimal decisions (too risky/cautious) associated with increased activity

• Decisions rated lowest in confidence and took the most time to answer associated with higher activation

Reasoning

The process of drawing conclusions from principles and from evidence

Move from what is already known to infer a new conclusion/evaluate a proposed conclusion

Divided into deductive & inductive

Deductive reasoning

The process of reasoning from one or more general statements regarding what is known to reach a logically certain conclusion

General statement/s —> specific application

Based on logical propositions

Useful because it helps connect various propositions to draw conclusions

1. Conditional reasoning

Reaching logically certain/deductively valid conclusions is possible

Proposition

An assertion which may be either true or false

Premise

Propositions about which arguments are made

Conditional reasoning

One of the primary types of deductive reasoning

The reasoner must draw a conclusion based on an if-then proposition (if antecedent condition p is met, then consequent event q follows)

Usual set of propositions from which can draw a well-reasoned conclusion: if p, then q. p. Therefore, q. —> illustrates deductive validity

Deductive validity

Logical soundness of reasoning

Inference follows logically from the propositions on which it is based

Does not equate with truth (depends on the truthfulness of the premises)

Deductively valid inferences

Modus ponens (affirming the antecedent)

Modus tollens (denying the consequent)

Deductive fallacies

Denying the antecedent

Affirming the consequent

Modus ponens

Affirming the antecedent (p)

If p, then q. p. Therefore, q.

Deductively valid

Modus tollens

Denies the consequent

If p, then q. Not q. Therefore, not p.

Deductively valid

Wason Selection Task

To study conditional reasoning in the lab

Pps presented with a set of four two-sided cards. Each card has a number on one side and a letter on the other side.

Face up are two letters and two numbers. The letters are a consonant and a vowel. The numbers are an even number and an odd number

Each pp is told a conditional statement e.g. “If a card has a consonant on one side, then it has an even number on the other side” —> task is to determine whether the statement is true or false

One does so by turning over the exact no. of cards necessary to test the conditional statement (pp must not turn over any cards that are not valid tests of the statement)

To evaluate the deduction, pp must turn over the card showing a consonant to see whether it has an even number on the other side —> they therefore affirm the antecedent (modus ponens)

In addition, pp must turn over the card showing an odd number to see whether it has a vowel on the other side. They thereby deny the consequent (modus tollens)

People with dispositions higher in distrust toward others or who have been exposed to a face that elicits distrust before task engage more frequently in negative hypothesis testing (modus tollens) and thus more often arrived at the right conclusions —> feeling distrust may make us less likely to take the correctness of any info for granted and thus look harder to verify the info

Beliefs regarding plausibility influence whether people choose the modus tollens argument

Performance on abstract permission task superior to perf on standard abstract task

Pragmatic reasoning schemas/pragmatic rules

General organising principles or rules related to particular kinds of goals, such as permissions, obligations, or causations

Not as abstract as formal logical rules, but are sufficiently general and broad so that they can apply to a wide variety of specific situations

Help us deduce what might reasonably be true

Perspective effects

Performance may be affected whether one takes the POV of the police officers or of the people drinking the alcoholic beverages

Evolutionary view of cognition

What kinds of thinking skills would provide a naturally selective advantage for humans in adapting to our environment?

Humans may possess something like a schema acquisition device

One of the distinctive adaptations shown by human hunters and gatherers has been in the area of social exchange

Schema acquisition device

Facilitates our ability to quickly glean important info from our experiences & organise that info into meaningful frameworks

Cosmides’s view:

• Highly flexible

• Specialised for selecting & organising info that will most effectively aid us in adapting to the situations we face

Social exchange schemas

Facilitate two kinds of inferences

1. Inferences related to cost-benefit relationships

2. Inferences that help people detect when someone is cheating in a particular social exchange

Syllogistic reasoning

Other key type of deductive reasoning based on the use of syllogisms

Syllogisms

Deductive arguments that involve drawing conclusions from two premises

All comprise 2 premises and a conclusion

Sometimes, the conclusion may be that no logical conclusion may be reached based on the two given premises

May solve using a semantic (meaning based) process based on mental models (contrasted with rule-based ‘syntactic’ processes)

Categorical Syllogisms

2P + 1C

Premises state something about the category memberships of the terms

Each term represents all, none, or some of the members of a particular class or category

As with other syllogisms, each premise contains two terms. One of them must be the middle term, common to both premises

The first and second terms in each premise are linked thorugh the categorical membership of the terms

State that some (or all or none) of the members of the category of the first term are (or are not) members of the category of the second term

To determine whether the conclusion follows logically from the premises, the reasoner must determine the category memberships of the terms

Example

• P1: All cognitive psychologists are pianists

• P2: All pianists are athletes

• C: Therefore, all cognitive psychologists are athletes

Subject: Cognitive psychologists
Middle term: Pianists
Predicate: Athletes

Cannot draw logically valid conclusions with two particular premises or with two negative premises

Circle diagrams

Used by logicians to illustrate class membership/ represent categorical syllogisms

Can use overlapping, concentric, or nonoverlapping circles to represent the members of different categories

Kinds of premises

1. Universal affirmative statements

2. Universal negative statements

3. Particular affirmative statements

4. Particular negative statements

Universal affirmative statements

Statements of the form “All A are B” because they make a positive statement about all members of a class

Universal negative statements

Negative statements about all members of a class

Particular affirmative statements

Positive statements about some members of a class

Particular negative statements

Negative statements about some members of a class

Mental model

An internal representation of information that corresponds analogously with whatever is being represented

Some are more likely to lead to a deductively valid conclusion than others

The difficulty of many problems of deductive reasoning relates to the number of representations needed to adequately represent the premises of the deductive argument —> must simultaneously hold in working memory each of the various reps

Johnson-Laird study

Pps asked to describe their conclusions and their mental models for the syllogism “All of the artists are beekeepers. Some of the beekeepers are clever. Are all artists clever?”

The choice of a mental model may affect the reasoner’s ability to reach a valid deductive conclusion. Because some models are better than others for solving some syllogisms, a person is more likely to reach a deductively valid conclusion by using more than one mental model

Heuristics in deductive reasoning

Overextension errors

Foreclosure effects

Premise-phrasing effects

Overextension errors

Overextend the use of strategies that work in some syllogisms to syllogisms in which the strategies fail us

E.g. although reversals work well with universal negatives, they do not work with other kinds of premises

Foreclosure effects

Fail to consider all the possibilities before reaching a conclusion

Premise-phrasing effects

E.g. The sequence of terms/the use of particular qualifiers or negative phrasing

May lead us to leap to a conclusion without adequately reflecting on the deductive validity of the syllogism

Biases in deductive reasoning

Generally relate to the content of the premises and the believability of the conclusion

Tendency toward confirmation bias

Confirmation bias

Seek confirmation rather than disconfirmation/rejection of what we already believe

The content of the premises and a conclusion both seem to be true; reasoners tend to believe in the validity of the conclusion even when the logic is flawed

To a lesser extent, people also show the opposite tendency to disconfirm the validity of the conclusion when the conclusion/content of the premises contradicts the reasoner’s existing beliefs

May lead to errors such as

1. Illusory correlations

2. Discounting error

3. Self-fulfilling prophecy

Inductive reasoning

The process of reasoning from specific facts or observations to reach a likely conclusion that may explain the facts —> may use that probable conclusion to attempt to predict future specific instances

Never can reach a logically certain conclusion (only well-founded or probable)

Forms the basis of the empirical method

Use for two reasons:

1. Helps increase their ability to make sense of the great variability in their environment

2. Helps them to predict events in their environment, thereby reducing their uncertainty

Cognitive psychologists seek to understand the how rather than the why

We reach inferences by generalising some broad understandings from a set of specific instances. As we observe additional instances, we further broaden our understanding. Or, we may infer specialised exceptions to the general understandings.

Empirical method

Cannot logically leap from saying “All observed instances to date of X are Y” to saying “Therefore, all X are Y” —> it is always possible that the next observed X will not be a Y

When we reject the null hypothesis, we use inductive reasoning. We never know for sure whether we are correct in rejecting a null hypothesis

Approaches to studying inductive reasoning

1. Causal inferences

2. Categorical inferences

3. Reasoning by Analogy

Causal inferences

How people make judgements about whether something causes something

David Hume: We are most likely to infer causality when we observe covariation over time: First one thing happens, then another. If we see the two events paired enough, we may come to believe that the first causes the second

Correlational evidence cannot indicate the direction of causation

Discounting error

Error that occurs when we fail to recognise that many phenomena have multiple causes

May commit the error once we have identified one of the suspected causes of a phenomenon: we stop searching for additional alternative or contributing causes

Self-fulfilling prophecy

E.g. Teachers often expect little of students when they think them low in ability. The students then give the teachers little. The teachers’ original beliefs are thereby ‘confirmed’

Categorical inferences

People use both information from their sensory experiences and information based on what they already know/have inferred previously

1. Bottom-up strategies

2. Top-down strategies

Bottom-up

Based on observing various instances and considering the degree of variability across instances

From these observations, we abstract a prototype

Once a prototype or category has been induced, the individual may use focused sampling to add new instances to the category

Focuses chiefly on properties that have provided useful distinctions in the past

Top-down

Include selectively searching for constancies within many variations and selectively combining existing concepts and categories

Reasoning by analogy

Helps connect our perceptions with our memories —> then activate concepts and items stored in our mind that are similar to the current input —> through this activation, can make a prediction of what is likely in a given situation

Can end up being made largely in the eye of the beholder rather than supporting the actual elements being compared

Alternative views of reasoning

1. Dual-process theory

2. Connectionist view

Dual-process theory

Alternative perspective on reasoning that contends that two complementary systems of reasoning can be distinguished

1. Associative system

2. Rule-based system

Sloman (1996): we need both systems. We need to respond quickly & easily to every situations the basis of observed similarities and temporal contiguities & need a means to evaluate our responses more deliberately

Connectionist framework:

• The associative system is represented early ITO pattern activation and inhibition

• The rule-based system may be represented as a system of production rules

Associative system

System of reasoning which involves mental operations based on observed similarities and temporal contiguities

Can lead to speedy responses that are highly sensitive to patterns and general tendencies

Detect similarities between observed patterns and patterns stored in memory

May pay more attention to salient features than to defining features of a pattern

Imposes rather loose constraints that may inhibit the selection of patterns that are poor matches to the observed patterns. Favours remembered patterns that are better matches to the observed pattern

Examples of such reasoning

• Representativeness heuristic

• Belief bias effect (syllogistic reasoning)

• False consensus effect

Rule-based system

System of reasoning which involves manipulations based on the relations among symbols

Usually requires more deliberate/painstaking procedures for reaching conclusions

Carefully analyse relevant features of the available data based on rules stored in memory

Imposes rigid constraints that rule out possibilities that violate the rules

Belief bias effect

Occurs when we agree more with syllogisms that affirm our beliefs, whether or not these syllogisms are logically valid