Deductive Reasoning and Decision Making

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##### Deductive Reasoning and Decision Making

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1. Chapter 12 Deductive Reasoning and Decision Making

2. Introduction • Thinking • deductive reasoning—given some specific premises, decide whether those premises allow you to draw a particular conclusions, based on the principles of logic • decision making—assessing and choosing among several alternatives Cognition 7e, Margaret Matlin Chapter 12

3. Deductive Reasoning • conditional reasoning (propositional reasoning)—tell us about the relationship between conditions; "if . . . then . . ."; judged as valid or invalid • syllogism—two statements that we must assume to be true, plus a conclusion; "all, none, some . . ."; judged as valid, invalid, or indeterminate Cognition 7e, Margaret Matlin Chapter 12

4. Deductive Reasoning • An Overview of Conditional Reasoning the propositional calculus antecedent consequent Cognition 7e, Margaret Matlin Chapter 12

5. Deductive Reasoning • An Overview of Conditional Reasoning • Four conditional reasoning situations (Table 12.1) • 1. Affirming the antecedent means that you say the “if…” part of the sentence is true. This kind of reasoning leads to a valid, or correct, conclusion. • 2. The fallacy (or error) of affirming the consequent means that you say the “then…” part of the sentence is true. This kind of reasoning leads to an invalid conclusion. Cognition 7e, Margaret Matlin Chapter 12

6. Deductive Reasoning • An Overview of Conditional Reasoning • Four conditional reasoning situations (Table 12.1) • 3. The fallacy of denying the antecedent means that you say the “if…” part of the sentence is false. Denying the antecedent also leads to an invalid conclusion. • 4. Denying the consequent means that you say the “then…” part of the sentence is false. This kind of reasoning leads to a correct conclusion. Cognition 7e, Margaret Matlin Chapter 12

7. The Propositional Calculus Cognition 7e, Margaret Matlin Chapter 12

8. Deductive Reasoning • An Overview of Conditional Reasoning Jonathan Evans's heuristic-analytic theory Cognition 7e, Margaret Matlin Chapter 12

9. Deductive Reasoning • Difficulties with Negative Information • people take longer to evaluate problems that contain negative information • people more likely to make errors on these problems • working memory strain Cognition 7e, Margaret Matlin Chapter 12

10. Deductive Reasoning • Difficulties with Abstract Reasoning Problems people are more accurate when they solve reasoning problems that use concrete examples rather than abstract, theoretical examples Cognition 7e, Margaret Matlin Chapter 12

11. Deductive Reasoning • The Belief-Bias Effect • role of background knowledge • belief-bias effect—when people make judgments based on prior beliefs and general knowledge, rather than on the rules of logic • people tend to make errors when the logic of a reasoning problem conflicts with their background knowledge (i.e., with what they “know” is correct) • e.g., “don’t confuse me with the facts” Cognition 7e, Margaret Matlin Chapter 12

12. Deductive Reasoning • How do we know when we are wrong? • What does it feel like? • Kathryn Schulz: On being wrong • http://www.ted.com/talks/kathryn_schulz_on_being_wrong.html Cognition 7e, Margaret Matlin Chapter 12

13. Deductive Reasoning • The Confirmation Bias • The Standard Wason Selection Task • confirmation bias—people would rather try to confirm a hypothesis than try to disprove it • Variations on the Wason Selection Task • subtle wording changes • clear, detailed instructions in conditional reasoning strategies • real-world situations Cognition 7e, Margaret Matlin Chapter 12

14. Deductive Reasoning • Confirmation Bias • Variations on the Wason Selection Task (continued) • Griggs and Cox (1982)—drinking age example • If a person drinks an alcoholic drink, then they must be over the age of 21 years old. Cognition 7e, Margaret Matlin Chapter 12

15. Decision Making no established rules no "correct" decision heuristics Kahneman and Tversky • proposed that a small number of heuristics guide human decision making • the same strategies that normally guide us toward the correct decision may sometimes lead us astray Cognition 7e, Margaret Matlin Chapter 12

16. Decision Making • The Representativeness Heuristic • respresentativeness heuristic—we judge that a sample is likely if it is similar to the population from which it was selected • we believe that random-looking outcomes are more likely than orderly outcomes • this heuristic is so persuasive that we often ignore important statistical information that we should consider Cognition 7e, Margaret Matlin Chapter 12

17. The Representativeness Heuristic • Sample Size and Representativeness • a large sample is statistically more likely to reflect the true proportions in a population than a small sample • small-sample fallacy Cognition 7e, Margaret Matlin Chapter 12

18. The Representativeness Heuristic • Base Rate and Representativeness • base rate—how often an item occurs in the population • base-rate fallacy—emphasize representativeness and underemphasize important information about base rates Cognition 7e, Margaret Matlin Chapter 12

19. The Representativeness Heuristic • Base Rate and Representativeness • Kahneman and Tversky—engineers and lawyers study • Bayes' theorem—judgments should be influenced by two factors: the base rate and the likelihood ratio • likelihood ratio—whether the description is more likely to apply to Population A or Population B Cognition 7e, Margaret Matlin Chapter 12

20. The Representativeness Heuristic • Representativeness and the Conjunction Fallacy • Tversky and Kahneman—"Linda", bank teller, feminist problem Cognition 7e, Margaret Matlin Chapter 12

21. The Representativeness Heuristic • Representativeness and the Conjunction Fallacy • conjunction rule—the probability of the conjunction of two events cannot be larger than the probability of either of its constituent events • conjunction fallacy—people judge the probability of the conjunction of two events to be greater than the probability of a constituent event • *** judge representativeness instead of statistical probability Cognition 7e, Margaret Matlin Chapter 12

22. Conjunction Fallacy Figure 12.1 The Influence of Type of Statement and Level of Statistical Sophistication on Likelihood Rankings. Low numbers on the ranking indicate that people think the event is more likely an incorrect decision. Cognition 7e, Margaret Matlin Chapter 12

23. Decision Making • The Availability Heuristic • availability heuristic—estimate frequency or probability in terms of how easy it is to think of relevant examples • true frequency "contaminated" by recency and familiarity Cognition 7e, Margaret Matlin Chapter 12

24. Availability Heuristic Cognition 7e, Margaret Matlin Chapter 12

25. The Availability Heuristic • Recency and Availability • judge recent items to be more likely than they really are • MacLeod and Campbell (1992) • when people were encouraged to recall pleasant events from their past, they later judge pleasant events to be more likely in their future • when people were encouraged to recall unpleasant events, they later judged unpleasant events to be more likely Cognition 7e, Margaret Matlin Chapter 12

26. The Availability Heuristic • Familiarity and Availability • judge more familiar examples to be more likely • divorce rates • diseases • media • violent events • population estimates • points of view • Tversky and Kahneman (1973)—famous and less famous names study Cognition 7e, Margaret Matlin Chapter 12

27. The Availability Heuristic • Illusory Correlation and Availability • illusory correlation—people believe that two variables are statistically related, even though there is no real evidence for this relationship • Stereotypes • Example: People on unemployment are lazy • social cognition approach—stereotypes are the result of normal cognitive processes; motivational factors are less relevant Cognition 7e, Margaret Matlin Chapter 12

28. Illusory Correlation Cognition 7e, Margaret Matlin Chapter 12

29. The Availability Heuristic • Additional examples • A friend says that cigarette smoking is not unhealthy because his grandfather smoked three packs of cigarettes a day and lived to be 100. • Someone at a party says that drivers of red cars get more speeding tickets. The group agrees with the statement because a member of the group, "Jim," drives a red car and frequently gets speeding tickets. • All Americans/Germans/Women/Men/Teenagers … Cognition 7e, Margaret Matlin Chapter 12

30. Decision Making • The Anchoring and Adjustment Heuristic • when making an estimate, we begin with a first approximation (anchor) and then we make adjustments to that number on the basis of additional information • people rely too heavily on the anchor and their adjustments are too small Cognition 7e, Margaret Matlin Chapter 12

31. Remembering Algorithms vs Experts - Stereotypes and Problem-Solving • Experts use Schemas built from their experience They evaluate about 6 pieces of information out of a much larger set of data. • The process is subject to: • Confirmation Bias • Representativeness • Availability • Anchoring and Adjustment Cognition 7e, Margaret Matlin Chapter 11

32. The Anchoring and Adjustment Heuristic • Research on the Anchoring and Adjustment Heuristic • Multiplication study (p. 420) • if the first number was large, the estimates were higher than if the first number was small • single-digit numbers anchored the estimates far too low • anchor may restrict the search for relevant information in memory Cognition 7e, Margaret Matlin Chapter 12

33. The Anchoring and Adjustment Heuristic • Applications of the Anchoring and Adjustment Heuristic • making judgments about other people • stereotypes and judging individuals • courtroom sentences Cognition 7e, Margaret Matlin Chapter 12

34. The Anchoring and Adjustment Heuristic • Estimating Confidence Intervals • confidence interval—range within which we expect a number to fall a certain percentage of the time • estimated confidence intervals tend to be too narrow • anchor may be erroneous and adjustments too small • people don't really understand confidence intervals • confidence intervals vs. estimated certainty Cognition 7e, Margaret Matlin Chapter 12

35. Decision Making • The Framing Effect • framing effect—the outcome of a decision can be influenced by: (1) the background context of the choice and • (2) the way in which a question is worded • Huber and colleagues (1987)—"Is the pitcher half empty, or is the pitcher half full?” Cognition 7e, Margaret Matlin Chapter 12

36. The Framing Effect • Background Information and the Framing Effect • Kahneman and Tversky (1984)—lost ticket/lost \$20 study Cognition 7e, Margaret Matlin Chapter 12

37. The Framing Effect • Question Wording and the Framing Effect • people distracted by surface structure of the questions • Tversky and Kahneman (1981)—"lives saved"/"lives lost" study • "lives saved" question led to more "risk averse" choices • "lives lost" question led to more "risk taking" choices • prospect theory • 1. When dealing with possible gains (for example, lives saved), people tend to avoid risks. • 2.When dealing with possible losses (for example, lives lost), people tend to seek risks. Cognition 7e, Margaret Matlin Chapter 12

38. The Framing Effect • Consumer behavior Would this sign affect your decision to purchase a sweet soda? “Contains 250 Calories” Cognition 7e, Margaret Matlin Chapter 12

39. The Framing Effect • Consumer behavior How about this sign? “Will take 60 minutes of rigorous exercise to burn off.” Cognition 7e, Margaret Matlin Chapter 12

40. Decision Making • In Depth: Overconfidence in Decisions • overconfidence—confidence judgments are higher than they should be, based on actual performance • illusory correlation • anchoring and adjustment Cognition 7e, Margaret Matlin Chapter 12

41. Decision Making • In Depth: Overconfidence in Decisions General Studies on Overconfidence • occurs in a variety of situations • own decisions vs. statistically observable measurements • future performance • variety of personal skills Cognition 7e, Margaret Matlin Chapter 12

42. Decision Making • In Depth: Overconfidence in Decisions Overconfidence in Political Decision Making • war decisions • failure to think systematically about the risks involved • each side tends to overestimate its own chances of success • politicians overconfident that their data are accurate • Tactical Decision Making Under Stress • crystal-ball technique Cognition 7e, Margaret Matlin Chapter 12

43. Decision Making • In Depth: Overconfidence in Decisions • Students' Overconfidence About Completing Projects on Time • planning fallacy—underestimate amount of time (or money) required to complete a project; also estimate the task will be relatively easy to complete • Shelley Taylor and colleagues (1998) • student project study • process simulation vs. control • optimistic scenario • anchoring and adjustment Cognition 7e, Margaret Matlin Chapter 12

44. Decision Making • In Depth: Overconfidence in Decisions Reasons for Overconfidence • 1. People are often unaware that their knowledge is based on very tenuous and uncertain assumptions and on information from unreliable or inappropriate sources. • 2. Examples confirming our hypotheses are readily available, whereas we resist searching for counterexamples Cognition 7e, Margaret Matlin Chapter 12

45. Decision Making • In Depth: Overconfidence in Decisions Reasons for Overconfidence • 3. People have difficulty recalling the other possible hypotheses, and decision making depends on memory. If you cannot recall the competing hypotheses, you will be overly confident about the hypothesis you have endorsed. • 4. Even if people manage to recall the other possible hypotheses, they do not treat them seriously. Cognition 7e, Margaret Matlin Chapter 12

46. Decision Making • In Depth: Overconfidence in Decisions Reasons for Overconfidence • 5. When people make decisions as a group, they sometimes engage in groupthink. Groupthink can occur when a cohesive group is so concerned about reaching a unanimous decision that they ignore potential problems, and they are overconfident that their decision will have a favorable outcome. Cognition 7e, Margaret Matlin Chapter 12

47. Decision Making • In Depth: Overconfidence in Decisions • my-side bias—overconfidence that one's own view is correct in a confrontational situation; often results in conflict Cognition 7e, Margaret Matlin Chapter 12

48. Decision Making • The Hindsight Bias • hindsight—judgments about events that already happened in the past • hindsight bias—judging an event as inevitable, after the event has already happened; overconfidence that we could have predicted the outcome in advance Cognition 7e, Margaret Matlin Chapter 12

49. Decision Making • The Hindsight Bias • Research About the Hindsight Bias • Carli (1999)—judgments about people; Barbara/Jack study • happy vs. tragic ending • both groups confident that they could have predicted ending • memory errors consistent with outcome • "blame the victim” Cognition 7e, Margaret Matlin Chapter 12

50. Decision Making • The Hindsight Bias Explanations for the Hindsight Bias • anchoring and adjustment • misremembering past events Cognition 7e, Margaret Matlin Chapter 12