Ch. 12 Deductive Reasoning & Decision-Making

Syllogism (2)

• A three-part argument

• Combines two premises to reach conclusions

• Requires a judgment

Four types of reasoning in propositional logic

Type 1 processing (5)

• Fast & automatic

• More error-prone

• Used in every day decision-making

• More subconscious

• Used during depth perception, recognition of facial expression, automatic stereotyping

Type 2 processing (3)

• Relatively slow & controlled (effortful); more reliable

• Focused attention -→ typically more accurate

• When we acknowledge our Type 1 response may have been incorrect

Illusory correlation

Confidence that two variables are related when the correlation is weak or nonexistent

Framing effect (3)

• Outcome of decisions may be influenced by:

  • Background context of choice

  • Wording or framing of question

Prospect theory (3)

• People tend to think that possible gains are different from possible losses

  • When dealing with possible gains, people tend to avoid risk

  • When dealing with possible losses, people tend to seek risks

Conditional/propositional reasoning (3)

• Describes the relationship between conditions

• Antecedent: first proposition/statement; the “if” part

• Consequent: second proposition; the “then” part

Findings of Wason et al. on the Standard Wason Selection task (2)

• Found that people show a confirmation bias

• People tended to affirm the antecedent → pick E (vowel) card

Base rate (2)

• How often the item occurs in the population

• Often ignored because of the representativeness heuristic

Base rate fallacy

Emphasizing representativeness and paying too little attention to info about base rate

The “Linda problem”

• Traced to the representativeness heuristic

• Conjunction fallacy demonstrates how people ignore the most basic principles of probability theory

Availability heuristic

People estimate likelihood of an event based on how easily examples come to mind

Representativeness heuristic

People judge the probability of an event based on how similar it is to a prototype or stereotype

Deductive vs inductive reasoning (2)

• Deductive moves from general knowledge and principles to more specific knowledge & examples

• Inductive uses specific observations and real examples to infer general theories about the world

Belief bias effect

When people make judgments based on prior beliefs and general knowledge rather than logic

Confirmation bias

Tendency to seek and remember info that confirms existing beliefs

Conjunction rule

The probability of two events happening together in conjunction cannot be higher than probability of either event happening individually

Anchoring effect

• When people rely too heavily on an initial piece of information anchor when making decisions and adjust insufficiently from it

• Emphasizes top-down processing

• Operates similarly for novices and experts

Recognition heuristic

If one of two options is recognized and the other is not, people assume the recognized one has higher value/frequency

Confidence intervals

• The range that we expect a number to fall within a certain percentage of the time

• Estimates for confidence intervals are usually too narrow → include the correct answer only 60% of the time

• Anchoring and adjustment heuristic plays a role in confidence intervals

Ecological rationality

(Todd et al. 2007) Describes how people create a wide a variety of heuristics to help them make useful, adaptive decisions in the real world

Default heuristic

If there is a standard—doing nothing—then people choose that option

My-side bias (2)

• Overconfidence that own view is correct in confrontational situations

• Emphasize Type 2 processing to reduce my-side bias

Hindsight

Judgments about events that happened in the past

Hindsight bias (4)

• We judge an event that happened as inevitable

• Reflects overconfidence that we could have predicted the outcome accurately in the past

• Stronger for experts in their particular domains

• Varies as a function of psychological well-being

Maximizers (3)

• Looks for maximum benefit & highest utility

• Compare decisions with others

• Tendency to regret decisions is higher

Satisficers (3)

• Settle for good enough options

• Do not bother comparing decisions with others

• More satisfied with outcomes

Small-sample fallacy

Assuming a small sample will be representative of the population → can lead to incorrect decisions