2.1.3 Thinking and Decision-making

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Key Definitions:

Decision-making strategy: a specific algorithm that enables one to solve a multi-attribute choice problem

Descriptive models: models of thinking and decision-making that describe how people actually think and make decisions, taking into account irrational factors
Macro-scale models: models that focus on observable actions and their predictors

Micro-scale models: models that focus on the transient process of making a decision (what goes on in a person’s mind when he/she is making a decision)

Multi-attribute problem: a choice problem involving choosing between several alternatives (options) each characterized by several attributes (parameters)

Normative models: models of thinking and decision-making that describe the rules of rational thinking and decision-making

Essential Understanding

• Thinking and Decision-making

  → Thinking: cognitive process responsible for modifying previously encoded information

  ↳ thinkings results in obtaining new information from existing information

  → Decision-making: cognitive process of choosing between given alternatives that involves a choice

→ both are closely connected to make a choice you need to use while thinking

• Models of Thinking and Decision-making: Two types of thinking

  ↳ can be distinguished into two categories: normative and descriptive models

  → Normative: describe thinking the way it should be

  → Descriptive: describe thinking as it is

• Theory of Planned Behavior (TPB)

  ↳ sees decision-making as actions that result form behavioral intentions like attitudes, perceived social norms, and perceived behavioral control

  →macro-level theory: looks at visible results of decision-making processes

↳ can be tested to establish its predictive validity: extent of which the combination of variables postulated in the theory actually predicts actual behavior

→ can be seen in Albarracin et al (2001)

• Adaptive Decision-maker Framework (Payne, Bettman, Johnson 1993)

  ↳ micro-level cognitive model→ zooms in on the transient internal process of making a decision

  → choice of strategy has four meta-goals: maximizing decision accuracy; minimizing cognitive effort; minimizing of negative emotion; minimizing the ease of justification

  ↳ theory claims that factors other than accuracy must be integrated directly into a model of decision-making

  → can be seen in Payne, Bettman, and Johnson (1993)

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  Normative and Descriptive Models

• Normative models

→ describe the “ideal” thinking and decision-making process

Ex: formal logic, statistic theory of probability, normative utility theory

↳ Formal logic describes correct thinking patterns

↳ Statistic theory of probability may be used as a normative model in making predictions

↳ Normative utility theory tells us what is right and wrong in choosing between economically attractive alternatives (define utility with monetary value)

• Descriptive models

→ describe the processes of thinking and decision-making that way they actually are

→ this is because it’s impossible for people to use normative models to make every decision: they require too many resources and assumes that we are full informed

→ real-life decisions are made under uncertainty and limited time

↳ psychology focuses on this model because of its prediction of people’s model, despite all their biases and fallacies

Theory of Planned Behavior→ Azjen (1985)

↳key: actions are determined by behavioral intentions which are determined by a number of subjective beliefs

• Macro level

  → looks at behavior at a major scale→ on the visible level of whether an action is performed or not

• Theory

  → behavioral intention determines effort

  ↳ the stronger it is, the harder we try to implement the behavior

  ↳ can be determined by three factors:

  → Attitudes: individual perceptions of the behavior (positive or negative)

  → Subjective norms: perceived social pressure about this behavior (acceptable or unacceptable)

  → Perceived behavioral control: perception of one’s ability to perform the action

→ the theory holds that if your attitude to a particular behavior is positive, then you believe this behavior is socially acceptable and you believe you can do this action→ thus, this creates a behavioral intention

↳ if the behavioral intention is strong enough, the action will be performed

• Research

→ requires self-report measures of four predictor variables and one target variable (future behavior itself)

→ predicts that there should be a correlation between attitudes, behavioral control, subjective norms, and behavior to intention

↳ however, behavior should not be significantly directly correlated with attitudes, subjective norms, or perceived control

→ if the theory gives a good fit to empirical data, it should have high predictive validity: four predictor variables collectively should be able to predict the target variable with high probability

Research for TPB

• Albarracin et al (2001)→ meta-analysis of TPB as a model for condom use

↳key: TPB fits well into observed behavior in the domain of condom use

Aim: investigate the predictive validity of the theory of planned behavior for people’s decisions to use or not use condoms (to prevent STDs)

Method: meta-analysis

Participants: 42 published and unpublished research papers with a total of 96 data sets

Procedure:

→ data sets from published research were combined into a single large data matrix

↳ this was then used to analyze the fit of the model of planned behavior

Results:

↳ TPB turned out to be a successful predictor of condom use

↳ Correlation of 0.51 between intention and behavior

→ significant correlations between behavioral intentions and norms, attitudes, and perceived control

Conclusion:

→ people are morel= likely to use condoms when they have formed an intention to do so based on attitudes, societal norms, and perceived behavioral control

→ confirms the predictive validity of the TPB in the domain of condom use

Adaptive Decision-Maker Framework (ADMF) Theory→ Payne, Bettman, and Johnson (1993)

↳key: people posses a toolbox of decision-making strategies and the choice is guided by emotion-related goals as well as an attempt to achieve accuracy

• Micro level

→ zooms in on the process of making a decision and looks at what’s happening in a person’s mind when he/she is making the decision

• → Example of a Decision-making scenario

↳ model below shows how people make a choice between alternatives against several attributes

• Strategies in the Toolbox

→ Alternative-based strategies: (WADD and SAT)

↳ select an alternative and compare attributes within it

↳ emotional tougher because they include trade-offs

→ Attribute-based strategies: (LEX and EBA)

↳ select an attribute and compare alternative against it

• Meta-goals

  ↳ strategy is also guided by four meta-goals, according to the model

Research for ADMF

• Luca, Bettman, and Payne (1997)

↳ key: emotional variables should be directly incorporated into the model

Aim: researchers predicted that if decision-making really adapts to emotion, then people who make choices involving emotionally difficult trade-offs will:

→ process information more extensively

→ choose strategies that allow them to avoid emotionally difficult trade-offs

Method: experiment; independent measures design

Participants: 27 undergraduate students

Procedure:

↳ subjects assumed the role of members of charity and were required to decide which of five candidate children would get financial support

→ each kid was described using five attributes (like living conditions) relevant to the decision-maker model

→ Participants were divided into two groups:

↳ Higher emotion group: participants were told that the other four children were not likely to receive help anywhere else

↳ Lower emotion group: participants were told that the other four children were likely to get help elsewhere

→ Measurement of the DVs was done via “Mouselab”

Mouselab: a software in which presented a table (children and attributes), but the information was hidden and participants and to click the mouse on a cell to reveal the information

↳ recorded the order of how the participants opened the cells

↳ also counted occurrence two types of transitions:

↳ alternative-based transitions (after opening cell A, open a cell for a different attribute but same child)

↳ attribute-based transitions (after opening cell A, open a cell for the same attribute but different child)

Results:

↳ Higher group:

↳ participants spent more time on the task

↳ opened a larger number of cells

↳ engaged more frequently with attribute-based transitions (less emotionally difficult trade-offs)

→ shows that participants were avoiding experiencing negative emotion in the process of making the decision

Conclusion:

→ predictions of the ADMF were confirmed

→ may be concluded that emotional variables need to be directly incorporated into a model of decision-making since the strategies of decision-making are not only influenced by, but directly adapt to, task-related emotion