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Chapter 11

Chapter 11- Decision Making- Cog.pdf

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Western University
Psychology 2135A/B
Amanda De Vaul- Fetters

CHAPTER #11: MAKING DECISIONS -Decision making: Mental activities that take place in choosing among alternatives -Rationality: Selecting ways of thinking and acting to serve your ends and goals and moral imperatives -Cognitive overload: When the info available overwhelms the cognitive processing available PHASES OF DECISION MAKING -Setting goals: oNeed to develop answers to the question “What am I trying to accomplish?” -Gathering info: oLaying out options and gathering info about possible criteria to use in making their choice -Structuring the decision: o Organizing info and options oDecision structuring: Managing different options/info -Making a final choice: oSelecting from the final set of options -Evaluating: oWhat went well? What didn’t? BASIC CONCEPTS OF PROBABILITY -Probability: Measurement of a degree of certainty (between 0 and 1) -Subjective probabilities: Influenced by characteristics of the probability estimator oObjective probabilities are not COGNITIVE ILLUSIONS IN DECISION MAKING -Biases: Ways of thinking that lead to systematic errors o Understandable and often justifiable ways of thinking but can lead to error -Cognitive illusions: Systematic biases and errors in human decision making oProvide info relevant to understanding normal functioning oThey are considered to be errors because one’s percept does not correspond with what’s really there oTell us how the percept system works Availability -When faced with the task of estimating probability, frequency, or numerosity, people rely on shortcuts or rules of thumb (Heuristics) to make these judgements easier -Availability heuristic: Assessing the ease with which the relevant mental operation of retrieval, construction, or association can be carried out oInstances that are more easily thought of, remembered, or computed stand out more in one’s mind --> more frequent or probable -It is easier to think of words that start with D than it is to think of words that have D as the third letter -Our own behaviors are more apparent and available to us (marriage household example) Representativeness -Representativeness heuristic: Abelief that outcomes will always reflect characteristics of the process that generated them -Ex.An expectation that the outcome of a series of coin flips will always look random -Ex. Linda is 31, a philosophy major, concerned with issues of discrimination and social injustice oOptionA) Linda is a bank teller oOption B) Linda is a bank teller and is active in the feminist movement o You would be inclined to choose B butAis much more probabalistic -Gambler’s fallacy: An erroneous belief that a random process will automatically keep track of the outcomes in order to make the overall rate of an outcome in the short run equal to the overall rate of that outcome in the long run oEx. Red has come up 8 times in a row so it must be “black’s turn” --> wrong -Arandom process will not always produce results that look random, especially in the short run -Hot hand: Belief that next time trial will be exactly the same oOpposite to gamblers fallacy oEx. Player who scores most goals will continue to do so -Law of small numbers: People expect small samples to resemble in every respect the populations from which they are drawn oIn reality, they are likely to deviate from the population and are less reliable -Man who arguments: Usually advanced by someone who just confronted, for instance, a statistical summary of a number of cases reporting that lung cancer rates are significantly higher among smokers than nonsmokers o“Well I know a man who smoked 3 packs a day and lived until 110” oIgnoring base rate information and instead paying attention to small samples Framing Effects -Framing effects: People evaluate outcomes as changes from a reference point, their current state oDepending on how their current state is described, they perceive certain outcomes as gains or losses oThe description is said to “frame” their decision or to provide a certain context -Context effects in decision making -We treat losses more seriously than gains of an equal amount -Changing the description of a situation can lead us to adopt different reference points and therefore to see the same outcome as a gain in one situation and a loss in another -Violation of rational decision making Anchoring -Anchoring: Initial starting points have huge effects on final estimates -Heavy reliance on first piece of info --> bias -Ex. 1x2x3x4x5 looks smaller than 5x4x3x2x1 but they are the same Sunk Cost Effects -Sunk cost effect: The greater tendency to continue an endeavor once an investment in money, effort, or time has been made -This should not affect the likelihood of future success -The resources have been used regardless of which option is chosen -All that should
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