Ch. 13 - Reasoning and Decision Making

Question 1

Reasoning

Answer 1

The act of drawing new conclusions from existing information

Question 2

Decision making

Answer 2

The action of choosing a specific course of behavioral actions from among multiple possibilitiees

Question 3

Expected utility theory (EUT)

Answer 3

David Bernoulli - Theory from economics that holds that people make decisions in accordance with maximizing expected value

Question 4

Neuroeconomics

Answer 4

A field of research that combines economics, psychology, and neuroscience in order to understand and predict human choices and reasonings, as they often seem irrational

Question 5

Premises

Answer 5

An estimate about whether certain possible facts about the world, called propositions, are true

Question 6

Proposition

Answer 6

Any statement that could be true or false

Question 7

Deduction

Answer 7

A kind of reasoning process where the conclusion follows directly from the initial premises.

Question 8

Induction

Answer 8

A kind of reasoning which relies on generalizing from/going beyond a certain set of information and extending it to make an informed guess. Inverse of deduction.

Question 9

Argument from analogy

Answer 9

A kind of inductive reasoning in which the observation that two things share some set of properties and conclude that they must share a different property

Question 10

One-shot learning

Answer 10

A kind of inductive learning in which a concept is learned from a single example.

Question 11

Bayesian inference

Answer 11

A mathematical model for updating existing beliefs, called “a prior with new data.”

Question 12

Generalization

Answer 12

Extrapolation (derive from) a limited number of observations to draw a conclusion about the broader population or category. Very important in scientific research involving sample populations.

Question 13

Syllogism

Answer 13

A kind of reasoning that involves drawing a conclusion from two or more propositional statements

Question 14

Statistical syllogism

Answer 14

A form of inductive reasoning in which observations about a group lead to an inference about an individual

Question 15

Categorical syllogism

Answer 15

Kind of syllogism consisting of three statements: two premises and one conclusion

1: All A is B
2: All C is A
3: All C is B

Question 16

Fallacy

Answer 16

Invalid syllogism

Question 17

Belief bias

Answer 17

A bias in deductive reasoning in which conclusions that are more believable are rated as being more valid. Likely caused by heuristics.

Question 18

Atmosphere effect

Answer 18

A tendency to rate conclusions as more valid when the qualifying words in the premises match those conclusions. Suggests that people don’t analyze syllogisms by following rules of logic.

Question 19

Mental model

Answer 19

A kind of mental simulation of the world.

Question 20

Mental model theory

Answer 20

Johnson-Laird 1983. People construct mental models based on the description in the syllogism. If syllogisms involve concrete concepts, people will generate visualizations to check validity. Not conclusively proven, but most supported theory

Question 21

Conditional/hypothetical syllogism

Answer 21

A kind of syllogism that states a rule that relates two propositions

Question 22

Modus ponens (affirming the antecedent)

Answer 22

A rule in relation to a conditional syllogism in which the antecedent is observed to be true, then the consequent may be concluded to be true

Question 23

Modus tollens (denying the consequent)

Answer 23

A rule in relation to a conditional syllogism when we observe that the consequent is false and conclude that the antecedent must be false as well

Question 24

Affirming the consequent

Answer 24

An invalid conclusion from a conditional syllogism in which one concludes the antecedent is true because the consequent is true

Question 25

Denying the antecedent

Answer 25

A kind of invalid reasoning from a conditional syllogism in which one concludes that the consequent is false based on the antecedent being false

Question 26

Wason (1968)

Answer 26

Presented participants with four cards with letters on one side and numbers on the other. Rule: if there is a vowel on one side, there is an even number on the other. How to determine if the rule is true? Flip the vowel to prove the rule, and flip the odd number to make sure the rule isn't disproved. most people were wrong. were more right with real-world situations.

Question 27

Confirmation bias

Answer 27

A tendency for people to find supporting evidence for a hypothesis or belief

Question 28

Heuristics

Answer 28

Mental shortcuts for drawing inferences based on limited information without slow deliberation. Can lead to systematic error

Question 29

Systems 1 & 2

Answer 29

**System 1**: Fast/automatic. Low effort thinking - inductive **System 2**: Slow/deliberate thought - deductive

Question 30

Availability heuristic/bias

Answer 30

Tendency to rely on information that quickly comes to mind when trying to make a decision (more words with K as the third letter than the first). Important mechanism in how people assess risk,

Question 31

Affect heuristic/bias

Answer 31

A reasoning heuristic consisting of a tendency for people to overestimate the risk of events that generate a strong emotional reaction

Question 32

Anchoring heuristic/bias

Answer 32

A reasoning heuristic in which people tend to focus and rely on initial pieces of information

Question 33

Representativeness heuristic/bias

Answer 33

A heuristic in which people rely on a person or object conforming to a specific category while neglecting other types of information or reasoning

Question 34

Conjunction fallacy

Answer 34

An error in logic in which people assume that two specific conditions are more probable than a single, encompassing condition. It cannot be more probable for someone to be A and B than to be A or B alone.

Question 35

Base-rate fallacy

Answer 35

An error in reasoning in which people ignore the underlying probability of an event in favor of some present evidence

Question 36

Confirmation bias

Answer 36

A tendency for people to look for evidence that can serve to support their current hypothesis or belief

Question 37

Cultural cognition

Answer 37

A tendency for people to hold beliefs about risk that are more consistent with their broader social and moral values (climate change seems more dangerous to liberals). They believe the general public would agree. Expert stats are not enough to change opinions on highly emotional issues, and can have the opposite effect.

Question 38

Decision making & positivity.

Answer 38

People tend to overestimate the likelihood of positive events. We take more risks because of this, and don't consider the potential negative consequence.

Question 39

Incidental emotions

Answer 39

Emotions that are not directly related to the decision under consideration

Question 40

Loss aversion

Answer 40

A tendency of people to prefer avoiding losing something as compared with not gaining something of equal value. (You have to have the potential to win almost double of what you might lose in order to consider it)

Question 41

Endowment effect

Answer 41

Tendency for people to place a higher value on objects they already own over those they don't yet own

Question 42

Ikea effect

Answer 42

Tendency for people to place a higher value on objects they built themselves vs those that others built

Question 43

Status quo bias

Answer 43

Tendency for people to leave things as they currently are rather than making a change

Question 44

Framing effects on decision making

Answer 44

People make decisions differently based on how a question and information is worded, even if two scenarios are identical

Question 45

Emotional factors in decision making

Answer 45

When people are highly emotionally aroused, they choose to do things they wouldn't normally do. **Crimes of passion**: acts of violence committed in the heat of the moment

Question 46

Integral emotions

Answer 46

Emotions that are directly related to a decision

Question 47

Incidental emotions

Answer 47

Emotions that are not directly related to the decision under consideration, but that happen to be the state of the person at the time they are making the decision

Question 48

Incidental emotions study by Jennifer Lerner 2004

Answer 48

What are people's purchasing/selling behaviors depending on emotions 3 groups. Videos made them sad, disgusted, or neutral. Disgust made for selling and buying at the lowest price, reflecting distaste for anything Sadness made people want to pay more, but sell for less. You want to change your current state, so you are willing to settle for higher price or lower turnout.

Question 49

Ultimatum game

Answer 49

An experimental paradigm in which two people, a proposer and a responder, split a pot of money. Guth, 1982. Participants only get money if both agree. Responders reject offers below a 7:3 split, forgoing either of them earning money.

Question 50

Ventromedial prefrontal cortex

Answer 50

Allows to process long-term outcomes of decisions, and *importance* of socially/morally appropriate decisions

Question 51

Somatic marker hypothesis

Answer 51

vmPFC is involved in associating emotional reactions (e.g. heart rate) with certain behaviors

Question 52

Stanford Marshmallow Experiment

Answer 52

Mischel & Ebbesen. Proves that a developed prefrontal cortex allows for the ability to delay gratification. Children in room with marshmallow. They were told not to eat it, and would get another marshmallow if they waited 15 mins. Many were perturbed. This was predictive of their ability to cope with stress later in life. PFC was more activated in non-go trials 40 yrs later. Results could be attributed to family background and environment.

Question 53

Nudge theory

Answer 53

An approach to behavioral modification in which conditions of the environment are used to influence behavior and decision making

Question 54

Opinions on nudge theory

Answer 54

Some dislike it because it only results in a temporary change in behavior. Some say it is too coercive. It is sure to continue being used regardless.