decision making and reasoning

Question 1

decision making

Answer 1

when we make decisions or judgments, we use heuristics guided by the principles of what we expect

Question 2

psychological theory

Answer 2

framing of information as well as emotions can guide how we asses risk when we make choices - ie prospect theory

Question 3

neuroscience

Answer 3

activity in emotional areas of the brain (amygdala) are linked to framing effects and prospect theory

Question 4

loss aversion and amygdala processing (de martino et al, 2010)

Answer 4

people avoid gambles (choices) when they are equally likely to either lose a small amount $10 or win a larger amount $15

patients with bilateral amygdala lesions lack loss aversion on gambling tasks compared to healthy controls

suggests that amygdala plays a key role in loss aversion

Question 5

neuroeconomics

Answer 5

studying how we make decisions, formalizing theories and linking it to the development of the brain

• combo of economic theory, neuroscience and psychology

Question 6

reasoning

Answer 6

a thought process that brings an individual to a conclusion

guides decision making

Question 7

inductive reasoning

Answer 7

making general conclusions from specific observations (specific to general)

conclusions can be false - when we are unaware of inductive reasoning, it can become a heuristic

a “probably but not definitely true” type of reasoning

Question 8

importance of inductive reasoning

Answer 8

basis of much of human learning

applying learned rules to new situations

language learning - learning the meaning of balloon when you see “purple balloon dog” when you already know ‘purple’ and ‘dog’

Question 9

deductive reasoning

Answer 9

using general theories to reason about specific observations (general to specific)

Question 10

logic

Answer 10

deductive reasoning: formal systems for generating statements that will be true if rules of the system are followed

Question 11

syllogisms

Answer 11

deductive reasoning problems that involve two premises and a conclusion

Question 12

validity of syllogisms

Answer 12

is the conclusion true given the premises’ logical form

valid = logical rules, not truth

ex. valid structure
(all A are B, all B and C, therefore, all A are C)

Question 13

atmosphere effect

Answer 13

people rate a conclusion as valid when the qualifying words in the premise match those in the conclusion

Question 14

mental model theory

Answer 14

people construct mental simulations of the world based on statements to judge logic and validity

why we fall for negative statements - hard to imagine the absence of something

Question 15

omission bias

Answer 15

idea that withholding is not as bad as doing
- inaction is harder to classify as wrong than action

another reason why people have trouble reasoning with negative action

Question 16

belief bias and syllogisms

Answer 16

people have problems reasoning with syllogisms in which logical validity conflicts with truth

the content of a syllogism can lead to errors due to belief bias - the tendency to think a syllogism is valid if the conclusions are believable

more dominant for invalid syllogisms
- when a conclusion is believable, people are much less likely to question its logic, whereas when a conclusion is unbelievable, it is much harder for people to accept, even when the logic is sound

Question 17

conditional reasoning

Answer 17

“if p then q” statements where p is the antecedent and q is the consequence

Question 18

watson’s four card test

Answer 18

ps shown 4 cards and given an if p then q statement

ex. if a card has a vowel has a vowel on one side, then it has an even number on the other side, which two cards should you flip?

E, F, 2 or 5

lots of people don’t test correctly - instead, rely on confirmation bias (tendency to seek out information that confirms what you believe)

instead, have to rely on falsification principles

Question 19

falsification principle

Answer 19

you need to look for situations that would falsify a rule

rule to solve if P then q
- choose the P card and the not Q card

Question 20

familiarity effects

Answer 20

people do better on the watson four card task on familiar topics

example:
if a person is drinking a beer (P), then the person is over 21 years old

many more people can solve this task than the more abstract version

Question 21

when do biases occur

Answer 21

when heuristics are over applied

systematically inaccurate choices that don’t reflect a current situation

Question 22

three categories of heuristics

Answer 22

ones that:
- bias how we interpret info
- bias how we judge frequency
- bias how we make predictions

Question 23

representativeness bias

Answer 23

probability that an item (person, object, event) is a member of a category because it resembles thay category

related to over use of schemas, and other preexisting knowledge structures

stereotyping, base rate neglect, and conjunction fallacy

Question 24

base rate neglect

Answer 24

we ignore important rate information when reasoning

Question 25

conjunction fallacy

Answer 25

assumes a greater number of specific facts are more likely than a single fact

Question 26

the availability bias

Answer 26

the easier it is to remember something, the more likely you’ll think it is to happen in the future (memory base bias)

affects how we estimate risk

Question 27

illusory correlations

Answer 27

linking two co occuring events and assuming a relationship

outcomes tend to be overemphasized/can affect how we predict outcomes in the world

Question 28

anchoring and adjustment heuristic

Answer 28

people’s judgements of the magnitude of something is biased by some initial value that they are exposed to

Question 29

gambler’s fallacy

Answer 29

the false belief that a predicted outcome of an independent event depends on past outcomes (assume outcomes are linked when they are random)

people continue to invest after several losses on the stock market

Question 30

hot hand belief

Answer 30

thinking that a person who experiences success will keep having success —- ‘a winning streak’

Question 31

predicting risk and optimism

Answer 31

we overestimate the likelihood of positive events happening to us and underestimate the likelihood of negative events

presence of depression moderates this effect

Question 32

post morten vs pre mortem technique

Answer 32

post: learning from failures

pre: more useful - anticipating and preventing mistakes before they result in catastrophe
- looking ahead at challenges that could cause failure
- create plan to navigate those challenges