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INST 354 Study Guide - Spring 2019, Comprehensive Final Exam Notes - Sunk Costs, Decision Tree, Edsel


Department
Information Studies
Course Code
INST 354
Professor
Anton
Study Guide
Final

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INST 354

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INST354 Lecture 1: Thinking and Deciding
Humans today evolved from ancestors hundreds of thousands of years ago who lived in small
groups and spent most of their waking hours foraging for sustenance. When we weren’t
searching for something to eat or drink, we were looking for safe places to live, choosing mates,
and protecting our off-spring. Our success in accomplishing these “survival tasks” arose not due
to distinctively acute senses or especially powerful physical capacities. We dominate this planet
today because of our distinctive capacity for good decision making. This same skill has allowed
us to leave the planet, for brief periods; but, of course, the skill has allowed us to develop
technologies and weapons that could render the planet uninhabitable if we make a few really
bad decisions. Human beings have an exceptional ability to choose appropriate means to
achieve their ends.
This book is about decision making, but it is not about what to choose; rather, it is about
how we choose. Most of the conclusions in this book follow from research conducted by
psychologists, economists, and biologists about how people actually make choices and
decisionspeople ranging from medical and financial experts to college student participants in
psychological experiments. The important finding is that diverse people in very different
situations often think about their decisions in the same way. We have a common set of cognitive
skills that are reflected in similar decision habits. But we also bring with us a common set of
limitations on our thinking skills that can make our choices far from optimal, limitations that are
most obvious when we must make judgments and decisions that are not like those we were
“selected” to make in the ancestral environments in which we evolved.
Our decision-making capacities are not simply “wired in,” following some evolutionary design.
Choosing wisely is a learned skill, which, like any other skill, can be improved with experience.
An analogy can be drawn with swimming. When most of us enter the water for the first time, we
do so with a set of muscular skills that we use to keep ourselves from drowning. We also have
one important bias: We want to keep our heads above water. That bias leads us to assume a
vertical position, which is one of the few possible ways to drown. Even if we know better, in
moments of panic or confusion we attempt to keep our heads wholly free of the water, despite
the obvious effort involved compared with that of lying flat in a “jellyfish float.” The first step in
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helping people learn to swim, therefore, is to make them feel comfortable with their head under
water. Anybody who has managed to overcome the head-up bias can survive for hours by
simply lying face forward on the water with arms and legs danglingand lifting the head only
when it is necessary to breathe (provided, of course, the waves are not too strong or the water
too cold). Ordinary skills can thus be modified to cope effectively with the situation by removing
a pernicious bias.
This book describes and explains these self-defeating thinking habits, and then suggests other
strategies that will improve the decision maker’s skill. This approach reflects the spirit of
Benjamin Franklin, whose letter of advice about a pressing decision to his friend Joseph
Priestley (1772) began, “I cannot, for want of sufficient premises, advise you what to
determine, but if you please, I will tell you how.” We will describe pernicious modes of thought
in order to provide advice about how to improve choices. But we will not suggest what your
goals, preferences, or aspirations ought to be when making these choices. The purpose of this
book is not to improve tastes, or preferences, or ethicsnor to provide advice about how to
implement decisions once they have been made. Likewise (unlike many other books written on
this subject), this book does not offer advice about how to feel good about yourself. Rather, our
purpose is to increase skill in thinking about decisions and choices. In addition, to better
understand the decision process and to identify the situations in which our choices are less than
optimal, we introduce a second perspective on decision making, namely analyses of the nature
of rational decision processes by philosophers and mathematicians.
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