Judgement, Decision making and inductive reasoning

Question 1

What are judgement researchers interested in?

Answer 1

‘how people integrate multiple, incomplete and sometimes conflicting cues to infer what is happening in the external world’

Question 2

What do you need to evaluate in decision making?

Answer 2

· Decision making involves choosing among various options. To do this you need to evaluate the probability and frequency.

Question 3

What are the two possible processes involved in decision making?

Answer 3

• An algorithm is a systematic rule that is guaranteed to produce the correct solution
• A heuristic is a mental short cut, rule of thumb that will produce a good enough estimate, or be correct most of the time

Question 4

What is the availability heuristic?

Answer 4

Our tendency to use information that comes to mind quickly and easily when making decisions about the future. People estimate the probability of an event based on how easy that outcome is to imagine (or retrieve from memory)

Question 5

What is base rate information?

Answer 5

the relative frequency of an event in the population

Question 6

What is base rate neglect?

Answer 6

• Ignore prior knowledge when estimating probable outcomes

- people don’t take into account all the information they are presented with

Question 7

What are factors affecting base rate neglect?

Answer 7

• In real world:
  § Base rate often not available
  § Not clear which base rate to use
• Causal relationship

Question 8

What is the base rate neglect representativeness heuristic?

Answer 8

• Events that are representative of a class are assigned a high probability of occurrence
• People tend to give more weight to anecdotal (personal) information, compared to statistical information
• How well an item fits with other existing data

Question 9

What is the conjunction fallacy?

Answer 9

• The probability of a conjunction P (A & B) cannot exceed the probability of either of its constituents, P(A) or P(B)
• Representativeness heuristic
  § Sometime the conjunction is more representative.

Question 10

What is Bayes theorem and what can you use it for?

Answer 10

It is a mathematical equation for calculating conditional probability and it offers a normative model against which probability judgements can be evaluated

Question 11

What does the representativeness heuristic lead people to do?

Answer 11

The representativeness heuristic leads people to overestimate the frequency of events that are deemed representative of their class. It could account for some aspects of base rate neglect and the conjunction fallacy.

Question 12

What is normative decision making?

Answer 12

consider how people should make decisions given perfect information etc. rational/ optimal

Question 13

What is prescriptive decision making?

Answer 13

Consider how people actually make decisions and defy heuristics (rule of thumb)

Question 14

What is the prospect theory?

Answer 14

Prospect theory- risky decisions: risk aversion for gains and risk seeking for losses
- people are much more sensitive to potential losses than potential gains

Question 15

What is Dawes sunk cost effect?

Answer 15

a sunk cost is already payed, most people will go through with whatever they used to incur cost even if it will make them feel worse

Question 16

What are framing effects?

Answer 16

The way in which options are presented affects choices

Question 17

Are experts immune from the framing effect?

Answer 17

No

Question 18

What is the omission bias?

Answer 18

• Anticipated regret: would feel more responsible if the child died from vaccine rather than if they died from disease

Question 19

What is bounded rationality?

Answer 19

• Bounded rationality: we produce reasonable or workable solutions to problems by using various short-cut strategies. People are ‘bounded’ by constraints and are as rational as their processing limits allow

Question 20

What is satisficing and are satisficers or perfectionists (maximisers)?

Answer 20

• We choose the first option that meets our minimum requirements (Simon 1978)
• Schwartz et al. (2002): satisficers and happier and more optimistic than maximisers (or perfectionists), they have greater life satisfaction and they experience less regret and self-blame

Question 21

Do people use normative or prescriptive approaches in decision making?

Answer 21

Prescriptive - humans make many inconsistent decisions

Question 22

What is reasoning?

Answer 22

the mental processes by which people derive conclusions from a given set of premises

Question 23

What is inductive reasoning?

Answer 23

involves deciding what is probably the best case based on one’s knowledge

• from specific to general
• Inductive reasoning goes beyond the information given
• Conclusions are not necessarily, but only probably true
• We use inductive reasoning all the time to make decisions about the world

Question 24

What does inductive reasoning result in a what do you do after that?

Answer 24

• Inductive reasoning results in a hypothesis
• Testing a hypothesis will result in either confirmation or falsification
• Confirmation involves finding evidence in support of the hypothesis
• Falsification involves finding evidence that does not support the conclusions
  A hypothesis cannot be proved

Question 25

What is the confirmation bias?

Answer 25

• People tend to test hypotheses by seeking confirming evidence rather than by attempting falsification of the hypothesis

Question 26

What is the positivity bias?

Answer 26

supposes that people are more likely to make positive tests of their hypothesis than negative tests

Question 27

What does the dual goal paradigm do?

Answer 27

allows p’s to use positive tests about the MED rule to gather information about the DAX rule