Section 3, Conundrum 11 William and Mary, Cognitive Psychology 311, Professor Ball

What are heuristics

cognitive short-cuts

what is the normative approach to decision-making?

optimal solution usually provided by a mathematical model or formula

what is the descriptive approach to decision-making?

the solution provided by individuals using a cognitive heuristic

what is the prescriptive approach to decision-making?

moving people’s decisions closer to the normative solution

what is the other term for “dual styles of thinking”?

systems of thinking

What does system 1 involve?

fast, instinctive, unconscious, processing of information that relies on heuristics and emotions

What does system 2 involve?

slower, effortful, deliberate, logical, and analytical processing of information

Which system usually leads to better, less biased decisions?

system 2

What did Wason show in the 1960s about System 1?

it can also lead to errors (biases) in reasoning

Wason’s experiments provide examples of what?

confirmation bias

How does the 4-Card Selection Task show confirmation bias?

participants prefer to select cards that confirm the rule and this is not helpful for this deductive reasoning task

How does the 2-4-6 Task show confirmation bias?

participants prefer to give numbers that confirm their hypothesized rule and again this is not helpful for this inductive reasoning task

Mendell (2011) shows how confirmation bias can occur for who?

psychiatrists and medical students when making diagnoses

Meppelink (2019) showed how confirmation biased can reinforce what?

attitudes to vaccines

Tversky and Kahnemann refined the heuristics and biases approach to what in the 1970s?

decision-making and judgements

What is the representativeness heuristic?

a random sample is viewed as more likely to occur if it more closely resembles the population distribution it comes from. For example, any specific sequence of coin tosses is no more likely to occur than other sequences of coin tosses that do not resemble the population as closely e.g., all tails).

What is the availability heuristic?

when people assess the likelihood of an event based on how available (easy) such events are able to be recalled, such as recalling words that start with the letter ‘r’ rather than words that have ‘r’ as the third letter.

What theory did Kahneman and Tversky develop?

Prospect Theory

what does prospect theory help explain?

choices involving loss and gain with uncertainty associated with each outcome

what is fundamental to prospect theory?

the notion that the subjective value of choices did not match their objective values and that outcomes involving gains (gain frame) were valued differently than equivalent-sized losses (loss frame).

what is loss aversion?

losses have a greater psychological impact than gains

What did Johnson (1993) show about rebates and deductibles?

loss aversion can lead individuals to prefer rebates (‘gain frame’) over deductibles (‘loss frame’) even though deductibles would be a better choice for the premium in their task

What loss aversion aspect did Camerer (1997) show?

how loss aversion could explain the irrational working hours of New York cabbies – who work longer on ‘bad’ (loss days) and less on ‘good’ days (gain days)

what is the endowment effect?

an object increases its perceived value when owned

how does the endowment effect relate to loss aversion?

it appears to enhance the ‘pain of loss’.

Carmon and Ariely (2000) provided an example of the endowment effect how?

college students were asked what they would be willing to pay for a ticket to the Final Four college basketball championship when compared with the price that other students would sell such a ticket if they owned one.

How many times larger was the seller’s price than the buyer’s price in Carmon and Ariely (2000)?

10

what is one theory for loss aversion?

the emotional impact is much greater for a loss than the emotional impact for an equivalent level of gain

Lerner (2004) manipulated the emotional state of participants to demonstrate?

endowment effect

how did Lerner (2004) researchers explain their results?

different emotional states can have on the motivational goals of an individual

De Martino (2006) examined the neural response to what?

gambles framed as a loss or as a gain

What did De Martino (2006) find?

that there was more activity in the amygdala when choosing the sure choice on the gain frame trials and when choosing the gamble in the loss frame trials

What do results of De Martino suggest?

emotion plays a role in loss aversion

What did Shiv (2005) test?

whether patients with damage to the regions of the brain associated with processing emotional information would show less loss aversion as a result of this damage

What happened with Shiv (2005) patients?

they made better decisions

What does De Wall (2015) suggest?

‘dulling’ the emotional ‘pain’ of a loss can reduce the ‘endowment’ effect that is hypothesized to result from loss aversion

what is prescriptive intervention in relation to loss aversion?

Reducing the personal impact of emotional consequences could provide a way of ‘debiasing’ the loss aversion

What is base rate neglect?

neglect of base rate information for an event’s occurrence when making judgments about diagnostic and screening tests that predict the event’s occurrence

Gigerenzer suggests we need to convert the probability information to what to correct base rate neglect?

natural frequencies

What did Hoffrage (2000) report?

medical students made better disease diagnoses when the information was provided to them as frequencies rather than as probabilities

Bramwell (2006)’s birth defect test research revealed what?

decisions were not improved when presenting frequency data to people heavily invested in making an optimal decision

How did Krynski and Tennebaum (2007) test a different ‘debiasing’ approach?

by providing participants with a causal explanation for why false positive mammogram results occur for women who don’t have breast cancer (result of benign cyst)