Cognitive Approach to Thinking and Decision-Making

COGNITIVE APPROACH TO THINKING AND DECISION-MAKING

  • William Shakespeare's Thought: "There is nothing either good or bad, but thinking makes it so."
THINKING MODELS

  • Types of Thinking:

    • Rational
    • Intuitive

  • Key Concepts:

    • Heuristics: Mental shortcuts for decision-making.
    • Framing: Presentation of information affecting choices.
    • Appraisal: Assessing significance of events.
    • Loss Aversion: Preference for avoiding losses over equivalent gains.

  • Dual Process Models:

    • System 1: Fast, intuitive thinking.
    • System 2: Slow, rational thinking.
RELATIONSHIP BETWEEN THINKING AND DECISION-MAKING
  • Thinking is integral to decision-making, influenced by concepts, processes, and individual goals.
  • Decision-making involves choosing from various options, heavily linked to personal thought processes.
AVERAGE DECISIONS MADE DAILY
  • Adults make about 35,000 choices per day, including 122 informed decisions; many change their minds frequently.
  • Specific daily choices: 227 related to food (Wansink & Sobal, 2007).
TYPES OF THEORIES ON THINKING
  • Normative Theories: Prescribe how decisions should be made rationally.
  • Descriptive Theories: Describe how decisions are actually made, acknowledging biases and heuristics.
DUAL PROCESS THEORY (Kahneman, 2011)
  • System 1 (Intuitive):
    • Characteristics: Fast, automatic, subconscious.
    • Uses: Heuristics, influenced by emotions.
    • Example: Instant gut feelings about people.
  • System 2 (Rational):
    • Characteristics: Slow, deliberate, requires effort.
    • Uses: Analytical thinking for complex decisions.
    • Example: Detailed comparison of product reviews.
RESEARCH EVIDENCE
  • Studies suggest System 1 often leads to better decisions due to efficient information organization in memory.
KEY STUDIES
  • Atler & Oppenheimer (2007): Cognitive Reflection Test given in different fonts resulted in better performance in hard-to-read font, indicating slower System 2 engagement.
  • Dijksterhuis (2004): Unconscious thought led to better decision-making outcomes compared to immediate or conscious thought.
  • Kruger et al.: Used effort judgments to depict how perceived effort influences quality evaluation.
EVALUATION OF DUAL PROCESS THEORY
  • Distinction between Systems 1 and 2 is well-supported but conceptual; actual decision-making involves various brain areas.
  • Not all researchers agree with the dual system model; alternative models suggest more frameworks.
HEURISTICS AND BIASES
  • Heuristics simplify decisions but can lead to biases.
  • Different types include:
    • Availability Heuristic: Choices based on recent memories.
    • Anchoring Heuristic: Expectations shaped by initial information.
    • Effort Heuristic: Quality judged by perceived effort.
    • Scarcity Heuristic: Rarity increases perceived value.
FRAMING EFFECT
  • Decisions change based on positive or negative presentation of information.
  • Tversky & Kahneman (1981) demonstrated framing effects in decision-making scenarios, influencing choices based on how options are framed.
LOSS AVERSION
  • Preference to avoid losses over seeking equivalent gains, with psychological pain from losses significantly outweighing pleasure from gains.
APPRAISAL
  • Evaluative process assessing personal significance of situations affects decision-making.
APPRAISAL VS. HEURISTICS
  • While heuristics serve as shortcuts, appraisals involve deeper evaluations and can also influence heuristic use in decision-making processes.