Judgment and Decision Making - PSYC 363

SIMILARITY JUDGMENTS

• Crocodile vs. Alligator

  • Common Features:

  • Both are reptiles

  • Possess sharp teeth

  • Carnivorous diet

  • Lay eggs

  • Adapted to swamps

  • Long lifespan (70-100 years in captivity)

  • Distinctive Features:

  • Snout shape varies

  • Habitat preference: Freshwater vs. Brackish water

  • Geographic location differences

  • Different speeds on land

  • Nesting sites vary

  • Skin color traits differ

• Elephant vs. Alligator

  • Common Features:

  • Excellent swimmers

  • Ancient lineage as species

  • Large body size

  • Maternal care for their young

  • Territorial nature

  • Long longevity

  • Distinctive Features:

  • Reptile (Alligator) vs. Mammal (Elephant)

  • Cold-blooded (Crocodile/Alligator) vs. warm-blooded (Elephant)

  • Size and weight differences between species

  • Habitat variations (aquatic vs. terrestrial)

  • Differences in their social structures

  • Disparities in brain size

WEIGHTING OF FEATURES

• Venn Diagrams
  • Used to illustrate common and distinctive features between species.

CONTRAST MODEL (Tversky, 1977)

• Formula: S(a,b) = xf(a,b) - yf(a-b) - zf(b-a)

  • Explanation:
  • $S$ represents an interval scale of similarity
  • Function $f$ reflects feature salience
  • Parameters $x$, $y$, and $z$ adjust the weight given to different features.

• Example:

  • Comparing the similarity of two countries, e.g., Mexico and the USA

ASYMMETRICAL SIMILARITY JUDGMENTS

• UMD Student Data (Winter 2024)
  • Students rated the similarity of North Dakota to Michigan and vice versa:
  • Michigan to North Dakota: Average = 4.375 on a scale of 1-10
  • North Dakota to Michigan: Average = 5.0 on the same scale

JUDGMENTS OF PROBABILITY

• Normative (Prescriptive) Approach:

  • Counts the number of ways an event can occur using:
    P(x) = rac{n!}{(n-x)! x!}
  • This accounts for the total number of combinations and success probability in multiple trials.

• Representativeness Heuristic (Kahneman & Tversky, 1972):

  • Evaluates a sample's probability by its similarity to the target population.
  • Example probabilities:
  • Outcomes such as p(X) = rac{1}{32} or p(X) = rac{1}{1296} imply how people perceive likelihood based on representativeness instead of statistical probability.

GAMBLER’S AND HOT HANDS FALLACIES (Tversky & Kahneman, 1971)

• Law of Small Numbers:
  • Describes the tendency of gamblers to believe results will even out over short series in lotteries, affecting bets over time.

BASE-RATE NEGLECT (Kahneman & Tversky, 1973)

• Base-Rate Estimation
  • Individuals often ignore the base rate information (general prevalence) in favor of similarities, leading to inaccuracies in judgment.

CONJUNCTION FALLACY (Kahneman & Tversky, 1982)

• The probability of combined events is often judged to be more probable than either of the individual events.

• Example:

  • Ranking scenarios for an individual named Linda shows biases in assessing her likelihood of fulfilling combined criteria.

ACCESSIBILITY HEURISTIC (Tversky & Kahneman, 1973)

• Recalls specific data influences judgments of frequency and probability, influenced by the ease of retrieval.

AVAILABILITY HEURISTIC (Slovic et al., 1979)

• Assesses risk by common, media-represented events rather than by raw statistics, noting how dramatic events lead to overestimating certain risks.

RATIONAL CHOICE THEORY DESCRIPTION INVARIANCE

• The assumption that individuals should evaluate the same information equally, regardless of how presented.

• Example scenarios to illustrate preferential biases based on phrasing or framing of choices.

FRAMING EFFECTS

• Impact of presentation:
  • A penalty vs. a discount can yield differing student registration behaviors.

DECISION MAKING HEURISTICS

• Ratio-Difference Principle:
  • The perceived value of changes in rates is more significant in relation to existing magnitudes rather than their absolute difference.

LOSS AVERSION AND PROSPECT THEORY

• Summary: “Losses loom larger than gains”, indicating stronger emotional responses to losses than equals to gains.

SUMMARY

• Topics covered include:
  • Similarity judgments, contrast models, probability judgments, heuristics, rational choice theory, and framing effects, which all impact decision-making processes.