Intuitive thinking + Bias thinking decision making - Tversky & Kahnermann SAQ

Anchoring Bias

This heuristic describes the tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

DPM - Dual Processing Model

• System 1 thinking is intuitive; it is good for quick decisions and requires only a small amount of effort. System 1 thinking makes use of cognitive "shortcuts" called heuristics. - Used in the study

• System 2 is rational thinking that consciously uses existing information to logically make a decision.

Aim of T&K

to investigate the impact of anchoring biases and heuristics on decision making

Method of T&K

• Study used two conditions: high anchor condition and low anchor condition

• High anchor condition were given the math problem - 8×7×6×5×4×3×2×1

• Low anchor condition were given the math problem - 1×2×3×4×5×6×7×8

• after 5 seconds pp had to estimate the answer to the math problem they were given

• The difference between both groups was the high anchor of 8 and the low anchor of 1 as the solution to the math problems is the same

Results of T&K

The pp in the high anchor condition estimated 2250 while the pp in the low anchor condition estimated 512

Conclusion of T&K - Anchoring Bias

In conclusion, anchoring bias affected decision-making because the pp with a low anchor estimated a lower solution to the math problem than the high anchor pp even though they both had the same math problem

Conclusion of T&K - Intuitive thinking

In conclusion, intuitive thinking affected decision-making because the pp all had to estimate the answer in 5 seconds so they didn’t have time to use rational thinking and had to use system 1 thinking which is intuitive thinking.