cog psych lecture 3/6
Decision making
Science and education - protests
Federal research grants - all funded by 2 agencies
Grants come w 2 kinds of money -
Indirect costs - ethics board money, boats for research
In US - most profs write papers to get grants for research
Budget cuts completely
Big cuts to NIH
All money frozen
Many labs are closing down
Judgment and decision making
Ppl draw conclusions from the evidence they encounter
System 1 - surface level decision making
Person A - using copier
Person B - requests to use the copier to make a small number of copies - request phrased as follows:
Excuse i have 5 pages …
Bc im in a rush
Bc i have to make copies
May i use the copy
If u give ppl a reason why u need to use the copy machine more ppl agreed to let other ppl use the printer
Pretending to have a surface level processing reason gives ppl a reason
System 1 - intuitive, automatic, unconscious, fast, frequent, emotional, error prone
System 2 - effortful, logical, analytic, calculating, conscious, infrequent
Heuristics - mental shortcuts
Real world implications
Many judgments begin w frequency
Should i do X or Y - often amounts to does X or Y usually result in a better outcome
The decisions we make is about how often we do things
Roommate and relationship fights (you always or you never)
Ppl planning (policy and individually) consistently overestimate dramatic risks while underestimating common risks
How often does one thing happen?
Many judgments begin with frequency ex - an assessment of how often an event has occurred in the past
Should I do X or Y
Does X or Y usually result in a better outcome
Should I worry abt X? - often amounts to how often does X really happen
Roommate and relationship fights (ex - you always.. & you never)
Ppl planning (policy and individually) consistently overestimate dramatic, vivid risks while underestimating common risks
Lots of evidence doctors over diagnose things they have recently encountered compared to genuinely more common things
Decisions abt vaccination are about relative risk aka frequency of certain events which are widely misunderstood
Many aspects of our life - is abt how often do certain things or events happen
Thinking of heuristics not as flaws but as shortcuts that usually work well, like cognitive illusions
availability heuristic - more recent events influence decisions more
recent and more easily remembered info often should influence decisions more
Witnessed a crocodile attack yesterday? Avoid that river today! – there was a croc attack yesterday so now it is more likley to have an attack today too
Memory favors emotional and vivid events bc theyre more likely to be survival relevant
Only becomes maladaptive in modern info environments (new, social media)
Base rate neglect -
Specific info often overrides general statistics in immediate, natural contexts
Knowing the average bear is docile doesnt help if this bear is charging at you
Becomes problematic in modern contexts where statistical thinking is crucial (medical diagnoses, financial planning, evaluating news)
U need the average over time
Improving your decision making
Making it more concrete, less abstract reliably improves performance
Classic version - there is about 6% chance that a woman without cancer will receive a positive mammogram
Twice as many ppl get it right - about 6% of those without cancer have a dense but harmless cyst - looks like a cancerous tumor on the X ray and thereby results in a positive mammogram
Switch from thinking abt probability to large samples
Single event probabilities - if u switch it and describe original problem - there are 1,000 women w cancer, 800 will receive a positive mammography
46% of undergrads reason correctly
How to improve decision making: rely on others independent opinions
Wisdom of crowds - in 1906 galton visited a livestock fair and stumbled upon a contest
Ox was on display and villagers were invited to guess the animal’s weight
787 ppl guessed the weight of ox
Some were experts like farmers
Some guessed high others guessed low but many guessed sensibly
Other than rely on your own opinions → rely on other people’s opinion too
Average guess - 1,197 pounds
Correct guess - 1,198 pounds
Now a very large literature on wisdom of crowds
If error is not systematic but just random it averages out
Ppl are unsure but not systematically biased, decision making is massively improved by using multiple ppl’s independent guesses
Ex - taking into account other ppl’s thoughts without biasing them first by telling them your thoughts
The wisdom of crowds
2008 UCSD - what if i dont have 500 friends to ask about every decision i make?
Measuring the crowd within - we have a crowd within all of us
The crowd within u - do we have ppl inside our head? - asked ppl some trivia questions:
What percentage of the world’s airports are in the US? - 30%
What percentage of the world’s roads are in india? - 10%
Give me 2 diff answers
Calculated error - more error is bad
Two guesses and calculate the average of two guesses
Immediate condition - how much error there was
You were better off answering that question - calculate average of two answers
If u wait 3 weeks - u can ask yourself the same question and take the average of the 2 answers
Improve your decision making: avoid deciding based on anticipated regret
Stumbling on happiness book - we are so bad at predicting what makes us happy
A lot of decision making is based on regret
Who is happier 1 year later: someone who won lottery today or someone who became paraplegic today?
Both lottery winners and paraplegics were as happy as each other
Their happiness levels reverted back to before they won lottery and before they became paraplegic
Avoid second guessing
Students took a photography class
Throw one pic away
Image they did not pick was destroyed
How happy are u w pic u chose?
In condition where they could change their mind - they were happier
In condition where they could not change their mind - they were not as happy
Make nudges
Teaching ppl info - does nothing for decisions
Reducing friction for things that u do want ppl to make is better that helps ppl not make certain decisions
Default choices - organ donation
Organ donation - saves many lives
If u change organ donation - opt in - i want to do that (higher percentage of donors)
U click a button that says i do not want to to do that
Default effects - are seen as what should be the correct answer
Behavioral nudges
Friction - choosing say no feels wrong
Small nudges work well
Behavioral nudges - not show up for court are sent to prison indefinitely
Highlighted what time in court they were supposed to be there - reduced failure to show up to 20%, prevented 30K ppl from being arrested in 3 years
Buy now, pay later
Retirement savings or new clothes
40% of u chose to have 100 now instead of in a month - u agree to a 213% credit card APR
Ppl dramatically underweighing themselves
Truth is not 50% in a month
Used all over cog psychology
How much ppl are willing to discount your future self
Measure of impulsiveness
Temporal discounting
Making decisions to buy clothes now vs later
U can reduce your own temporal discounting - by episodic future simulation - visualize yourself in the future in a specific scenario
Varies a lot between ppl
Cog psych - explain biases and heuristics - thinking more concretely
Not trying to stimulate happiness and regret - make decisions based on other ppl and nudging yourself
Deduction and confirmation bias
Deductive reasoning - deduction - going from general laws to particulars
Every UCSD undergrad is smart
Mary a a UCSD undergrad
Therefore mary is smart
Is this syllogism valid?
All P are M
All S are M
Therefore all S are P
Better in concrete terms
All plumbers are mortal
All killers are mortal
Therefore all killers are plumbers
Logical form of both of these - easy to reject the concrete one
Most common way ppl are bad at reasoning
Ppl are poor at logic intuitively
Which cards do you need to flip over?
If a card has a vowel on one side, then it has an even number on the other side
Should i flip over E, J, 6 or 7
Correct answer is u have to flip over E and 7
Common answers - E, or E and 6
J does not have a vowel
6 feels really tempting
7 is actually critical
We disconfirm the rule
Evidence the rule is not true
Confirmation bias
We look for evidence that confirms what we believe and overlook evidence that could disconfirm what we believe
E - can confirm or disconfirm, so doubly informative
A quick puzzle to test your problem solving
Numbers they give as an example - doubling even numbers
Anything else - sequencing of doubling numbers are true
U could have entered pi
4.5 times more green than red
Nobody answered a number that was an integer
95% of u entered in increasing integers
Confirmation bias - we look for info that is consistent with what we think
Diff card game
Age on one side and drink on other side
If u have a beer card, u must be 21 or older
Cards - 24, beer, 18, and cola
It doesnt matter what the 24 year old drinks
Confirmation bias - not deeply based on logic
Framing effects and prospect theory - making choices under uncertain conditions
Which bet would u prefer -
4% chance of 5 million dollars (most ppl choose this one)
5% chance of 2 million dollars
80% chance of 5 million
100% chance of 2 million (this one is chosen most)
78% chance of 5 million
98% chance of 2 million (this one is chosen most)
Prospect theory
How much ppl prefer or like something is not based on the value, they internally assign to an amount of money (or some other good) is not equivalent to the monetary value
How much someone likes something is just based on what the subjective utility of the item is
Subjective utility - differs from actual value in key ways
Each additional dollar added feels less valuable and losses loom larger than gains
Do i like something because it is expensive or do i like something because it is very useful
People usually like things more if they can use it well
Think about how much you like something - i like it more and i hate it more is down
Taking away 100 dollars is not half as bad as taking 200 dollars from someone
Diminishing returns - additional gains (or losses) are not valued as much as early gains or losses
Your first 100 dollars feels real good
Second 100 dollars feels less good
Loss aversion - the loss part is much steeper
Would you take ab bet where if a coin comes up heads, i give you 100 dollars but if it comes up tails, you give me 100 dollars
Losing 100 dollars sucks
Sucks more to lose 100 than to gain 100
Losses are worse than gains
Framing effects
Imagine the US is preparing for the outbreak of an unknown disease, expected to kill 600 people
If program A is adopted, 200 people will be saved - 72% preference
If program B is adopted, there is one third probability that 600 people will be saved and two thirds probability that no people will be saved - 28%
Ppl are risk averse in one situation and risk taking in another
One third of big blue bar - one third chance of this
Losing 400 ppl is worse then ⅓ of no one dying
You can take exact situation and flip losses to gains
Some ppl will talk abt things solely in gains or losses
Commonly thought about idea
People are more willing to take losses than bets - more willing to do risky things
Correct truth - especially with money - perfectly straight line is the truth - $5 is $5
Would you walk 20 min across campus to get a free burrito - yes
Would you drive 20 min to another car dealership to get $10 off of the same car
Prospect theory - the way we actually feel about things - depends on starting point and depends on how big it is in a nonlinear way
If this describes behavior - it should be the proofs of these
Framing effects - u can flip things from losses to gains
Does this subjective utility make any sense?
We are willing to accept smaller gains instead of risks for bigger gains
Does being risk averse make any sense? -
Imagine you are an animal looking for food
Animal makes many independent choices with uncertain outcome
Some riskier than others
Survival threshold - if we repeatedly make risky choices and get no food - are bad decisions
On average - we make conservative decisions - we tend to be too conservative
Framing effects as rational?
There are 600 total things
An object or event is judged more favorably when described in the positive frame than negative frame (ex - we prefer 200 will be saved instead of choosing 400 will be killed)
Pragmatics involved in framing an interaction
I met anna kendrick last weekend and we sang a duet
Anna kendrick met me last weekend and we sang a duet (i think i am someone important)
If u look at how ppl frame things - it is always informative
Glass half full OR glass half empty
Often the speakers’ choice of framing (their sentences) contain implicit pragmatic information
Maybe framing effects are a reasonable inference in a social world
Pragmatics can still be used against us because people decide how they want to frame certain things
This does not mean things are not irrational in some way or another
The speaker can convey info to you
Effects decisions to you
We’re making objectively different decisions
Decision making - two systems
System 1 (intuition) - fast, automatic, frequent, emotional, stereotypic, subconscious, impervious to verbal instruction, heuristic based
This is what people use most of the time and is considered the default mode
System 2 (reasoning) - slow, effortful, infrequent, logical, calculating, conscious, requires working memory, basis of intelligence
Comes in when decisions or actions become complex and need attention with a feeling of concentration
We can engage in more complicated thinking