Lecture 21: Decision Making II Flashcards
(13 cards)
Extrasensory Perception:
- Sequences that you think will look random will never think TTT or HHH, so HHT, TTH, or HTH are chosen
- Evidence for people’s mind choosing randomly than not
Intuitions about Chance:
- If the process is random then every small sample is expected to look random
- 31, 32, 33, 36, 37, 29
- Same likelihood as:
- 5, 11, 24, 29, 33, 39
Two Hospitals in a town, one has 45 births a day, other has 15. Which hospital recorded more days on which over 60% of births were males?
- Same = 56%
- Larger = 24%
- Smaller = 20% (correct)
- The less people there are, the likelihood of a larger percentage
Another mistake that can happen when making decisions include….
- Misreading samples (ignoring sample size)
- Gambler’s Fallacy
- Examples of biases in judgement resulting from the operation of the representativeness heuristic
What is the Gamblers’ Fallacy:
- If something happens more frequently than normal during some period, it will happen less frequently in the future, or that, if something happens less frequently than normal during some period, it will happen more frequently in the future (presumably as a means of balancing nature)
Is there such a thing as ‘streak shooting’?
- 91% basketball fans said ‘yes’
- But actually : mostly equal %
The Sunk Cost Effect is the tendency to….
- Continue with an endeavour once an investment of time, effort, or money has been made
Examples of the sunk cost effect:
- Waiting on the phone
- Sitting through a bad movie or play
- Clyde Dam project; Vietnam war
- Relationships
- Car Repairs
- Motivated by a desire not to ‘waste’ prior investments
Entrapment is where:
- A decision making process whereby individuals escalate their commitment to a previously chosen, though failing course of action in order to…‘make good’ on prior investments
Entrapment can be used positively for example…
- Make it difficult to quit
- Focus on the past (‘your journey’)
- Social support and competition
- Ignore future costs
Are we fatally flawed decision makers?
- “Human incompetence is presented as a fact, like gravity”
Simple _______ and decision strategies can lead to _______ almost as good as _______ strategies. Complex strategies ______ under stress and time pressure, but heuristics ______.
- Heuristics
- Outcomes
- Complex
- Degrade
- Don’t
Decision Making is a vast and complex topic….
- People make many systematic errors in judgement
- Our intuitions about chance and likelihood are often incorrect
- Our prior decisions can trap us
- Decision processes are generally adaptive and smart
