PSC 100 - L15 - Decision Making

judgment

The process through which ppl draw conclusions from the evidence they encounter

frequency estimate

Judgment

Many judgments involve a blank = an assessment of how often various events have occurred in the past

• Often don’t have access to this

heuristics

Efficient strats that usually lead to the correct answer

availability heuristic

Heuristics

The ease w/ which examples come to mind is a proxy for frequency or likelihood

• Typically accurate cuz freq of events/objects are likely to easily come to mind

• Can still result in error

overestimate

Heuristics

Range of Availability Effects

People regularly blank the frequency of rare events

• Rare events likely to be well-recorded in memory, & thus more available than common events

6

Heuristics

Range of Availability Effects

In a study by Schwarz et al. (1991), students were asked to recall past episodes of assertiveness. One group was asked to give 6 and the other 12.

• Who judged themselves as more assertive? Why?

representativeness heuristic

Heuristics

Assumption that resemblance to the prototype reflects probability

assumption of homogeneity

Heuristics

An expectation that each individual is representative of the category overall

gambler’s fallacy

The belief that past events affect future independent events

covariation

Where X & Y “covary” if the presence (o magnitude) of X can be predicted by the presence (o magnitude) of Y, & vice versa

• Main contributor to correlation coefficient

• Negative o positive

• Can vary in magnitude (strength)

• Necessary to check a belief abt cause & effect

confirmation bias

Detecting Covariation

Illusions of Covariation

Assessment of covariation is often distorted by blank, which is the tendency to be more alert to (attend to and remember) evidence that confirms one’s beliefs than to evidence that challenges them

base rate information

Info about how frequently something generally occurs

• Neglecting this can lead to inaccurate estimates of covariation

diagnostic information

Base Rates

Information that determines whether an individual case belongs to a category

base rate, diagnostic info, base rate neglect

Base Rates

• When base-rate info is only provided, judgments are based on…

• When base-rate & diagnostic info are provided, judgments are based on… leading to…

type 1

Dual Process Models

A type of thinking in dual process models that is fast, automatic, and relies on heuristics

type 2

Dual Process Models

A type of thinking in dual process models that’s slower, effortful, and more likely to be correct

induction/inductive reasoning

Confirmation & Disconfirmation

The process through which you forecast about new cases based on observed cases (specific to general)

• E.g. If you fail a couple of courses with Professor A, would you take a 3rd course with them?

deduction/deductive reasoning

Confirmation & Disconfirmation

The process through which you start with the “givens” and ask what follows from these premises (general to specific)

• E.g. Everyone in this class is an English major; Jesse is in this class; therefore, Jesse is an English major

confirmation bias

Confirmation & Disconfirmation

A greater sensitivity to confirming evidence & a tendency to neglect disconfirming evidence

belief bias

Logic Syllogisms

• Where if a syllogism’s conclusion happens to be something people believe to be true anyhow, they’re likely to judge the conclusion as following logically from the premises

• If the conclusion happens to be smth they believe to be false, they’re likely to reject the conclusion as invalid

principle of utility maximization

Logic Syllogisms

Decision Making: Costs & Benefits

Choosing the option w/ the greatest expected value; balance of costs & benefits

• Problem: Decisions often guided by factors that have little to do w/ this

framing heuristic

A cognitive bias where ppl decide on options based on whether the options are presented with positive or negative connotations

• E.g. Which is more healthier, 75% fat free or 25% fat? Although the same, ppl will pick 75% fat free

endowment effect

Framing Heurisitcs

Opt-In VS Opt-Out

The tendency to put a higher value on our current status & possessions simply cuz they’re currently our own

reason based choice

Framing Heurisitcs

Maximizing Utility VS Seeing Reasons

Decision-making where the goal is to make decisions that we feel good about cuz we feel they’re reasonable & justified. How is this illustrated with the doctor example?

temporal discounting of reward

Where delaying a reward reduces its value due to risk aversion (e.g. $20 today vs $20 in a month)

inequality aversion

Social Decision Making

Where ppl dislike distributions that are unequal

• Ppl expect the norm of fairness

• Ppl reject offers that violate that expectation