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Decision Making and Judgments

Decision Making and Judgments. Decision making/judgments are special cases of problem solving in which possible solutions or choices are already known Logical decision making Compensatory model Rational decision-making model in which choices are systematically evaluated on various criteria

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Decision Making and Judgments

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  1. Decision Making and Judgments • Decision making/judgments are special cases of problem solving in which possible solutions or choices are already known • Logical decision making • Compensatory model • Rational decision-making model in which choices are systematically evaluated on various criteria • Example: buying a car • Good when issues are well-defined

  2. Using and Misusing Heuristics Two kinds of heuristics, representative heuristics and availability heuristics, have been identified by cognitive psychologists. Courtesy of Greymeyer Award, University of Louisville and the Tversky family Courtesy of Greymeyer Award, University of Louisville and Daniel Kahneman Amos Tversky Daniel Kahneman

  3. Representativeness Heuristic Judging the likelihood of things or objects in terms of how well they seem to represent, or match, a particular prototype. If you meet a slim, short, man who wears glasses and likes poetry, what do you think his profession would be? An Ivy league professor or a truck driver? Probability that that person is a truck driver is far greater than an ivy league professor just because there are more truck drivers than such professors.

  4. Availability Heuristic Operates when we base our judgments on how mentally available information is. The faster people can remember an instance of some event the more they expect it to occur. Social Judgments? Presented people with a single vivid case of welfare abuse. Then with statistical reality. The case had a bigger influence on opinions when people were polled (Duncan 1988)

  5. Availability Heuristic Why does our availability heuristic lead us astray? Whatever increases the ease of retrieving information increases its perceived availability. How is retrieval facilitated? • How recently we have heard about the event. • How distinct it is.

  6. Overconfidence Intuitive heuristics, confirmation of beliefs, and the inclination to explain failures increase our overconfidence. Overconfidence is a tendency to overestimate the accuracy of our beliefs and judgments. At a stock market, both the seller and the buyer may be confident about their decisions on a stock.

  7. Exaggerated Fear The opposite of having overconfidenceis having an exaggerated fear about what may happen. Such fears may be unfounded. The 9/11 attacks led to a 20% decline in air travel due to fear. 800 more people would die if they drove just half those miles AP/ Wide World Photos

  8. Why do we fear? • We fear what our ancestral history has prepared us to fear • We fear what we cannot control • What is immediate • What is most readily available in memory

  9. Framing Decisions Decisions and judgments may be significantly affected depending upon how an issue is framed. Example: What is the best way to market ground beef — as 25% fat or 75% lean?

  10. Belief Bias The tendency of one’s preexisting beliefs to distort logical reasoning by making invalid conclusions. Democrats support free speech Dictators are not democrats Dictators do not support free speech. God is love. Love is blind Ray Charles is blind. Ray Charles is God. Anonymous graffiti We more easily see the illogic of conclusions that run counter to our beliefs than those that agree with our beliefs.

  11. Belief Perseverance Belief perseverance is the tendency to cling to our beliefs in the face of contrary evidence. If you see that a country is hostile, you are likely to interpret their ambiguous actions as a sign of hostility (Jervis, 1985).

  12. Bias in the process • Confirmation Bias – while we solve the problem this is our eagerness to look for information that confirms our ideas • Belief Bias – our prior ideas distort our logic • Belief Perseverance – clinging to our prior idea even after it has been discredited • Charles Lord 1979 Capital Punishment

  13. Perils & Powers of Intuition Intuition may be perilous if unchecked, but may also be extremely efficient and adaptive. • Hindsight Bias • Illusory correlation • Blindsight • Memory Construction • Divided attention • Implicit Memory • Representativeness • Availability • Heuristics • Overconfidence • Priming • Belief perseverance • Perception • Confirmation bias • Framing

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