cog psych 4.29

Overview of Judgments and Decision Making

• Key Components: Judgment, Decision Making, Inductive Reasoning.

• Interrelatedness: All three processes are separate yet influence one another.

Judgments

• Definition: Making assessments about uncertainty based on available evidence.

• Example: Deciding on taking an umbrella based on analyzing the weather.

• Process: Involves evaluating current evidence, prior experiences (like memory of past weather), and combining information for an estimate of probability (e.g., whether it will rain).

• Importance: Judgments form the basis for subsequent decision making.

Decision Making

• Definition: Involves choosing among alternatives after making judgments.

• Examples of Choices: Leaving the umbrella at home, taking it, or wearing a poncho.

Inductive Reasoning

• Definition: A logical process that uses observations to derive general principles.

• Example: Observing characteristics of crows to conclude they are mostly black.

• Judgments Types:

  • Probability Judgments: Estimations about the likelihood of events.

  • Similarity Judgments: Assessing if two cases belong to the same category.

  • Frequency Judgments: Evaluating how common an event is.

• Limitations: Inductive reasoning can lead to inaccurate conclusions due to limited data.

Heuristics

• Definition: Cognitive shortcuts for fast decision making.

• Examples: Availability and Representativeness Heuristics.

Availability Heuristic

• Definition: Events that come to mind easily are judged as more likely or frequent than those that don't.

• Example: When asked about words with the letter 'r', people are more likely to remember words that start with 'r' rather than those where 'r' is the third letter, leading to incorrect judgments about frequency.

Representativeness Heuristic

• Definition: Judging the probability of an event based on how much it resembles the typical case.

• Example: Assuming a man described as conservative and mathematically minded is an engineer rather than considering base rates.

• Base Rate Neglect: Individuals may ignore relevant statistical information in favor of descriptive attributes.

• Conjunction Fallacy: Assuming that specific conditions are more probable than a single general condition (e.g., believing Linda is a bank teller involved in feminist movements is more common than just being a bank teller).

Expected Utility Theory

• Definition: A mathematical model in economics that suggests individuals make decisions to maximize their utility (happiness and satisfaction) while minimizing potential losses.

• Example of Irrational Decision: In a study with two bowls of beans (one with 10 beans, one with 100 beans), most participants chose the bowl with 100 beans despite worse odds for selecting a winning bean.

Summary

• Inductive reasoning and heuristics lead to quick judgments and decisions but can result in errors.

• Understanding these concepts is crucial in assessing human behavior and thought processes.