Psychology
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SVDecisionMakingI.pptxDecision Making
Psych 105 Decision Making Chapter 8(1)
Decisions
BIG decisions
Outcomes are often multi-layered: One leads to another
NOT
What to eat for dinner
What movie to watch on Friday
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How do we make decisions?
Determine the possible outcomes
Evaluate each possibility for pros & cons
Decide which outcome you desire
Generate multiple ways of getting there
Select the best option
Making a Major Decision
What do you want to be when you grow up?
Choose a career: What are your priorities?
Money?
Helping others?
Fame?
Job satisfaction?
Choose a college: What are your priorities?
Prestige?
Location?
Degree options?
Finances?
Context effect: what’s going on around us at the time
Prior knowledge effect: based on previous schemas and what we already know about the situation
Personal values: what’s intrinsically
important to you
What affects our decisions?
Subjective utility
Measures of importance are relative
Priority vs. optional
Pros/cons
Risk assessment
Emotional vs. rational
Hindsight & Forethought
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Fallacies in Decision Making
"Never ignore a gut feeling, but never believe that it's enough." -- Kermit the Frog
Failure to seek disconfirming evidence
Overconfidence
Availability Heuristic
Representative Heuristic
Wishful thinking
Reactance
Entrapment
Reciprocity
Liking
Exposure effect
Emotional states
Mindlessness
Related to the Confirmation Bias
Failure to seek disconfirming evidence
Looking to confirm or justify our decisions, rather than analyze them impartially
Consider: A patient comes in complaining of a high fever and sore throat.
Doctor: Do you feel achy all over?
Patient: Yes
Doctor: Did the symptoms begin a few days ago?
Patient: Yes
Doctor: You must have the flu.
Related to the Confirmation Bias
Overconfidence
Believing your decision making skills are perfect
Most people believe that they think well – it’s other people whose thinking needs improvement!
When shown (misspelled) words to fix, people will fix all words and answer they are 100% confident in all answers.
Reality – They are about 80% correct in responses.
Confidence was overestimated!
The Availability Heuristic
In the English language, consider the letter K.
Is this letter more likely to appear
A) in the first position
B) in the third position
My estimate for the ratio of these two values is…
The Availability Heuristic
We tend to correlate events that are close together (false cause!)
We are biased by events that are more vivid or well-publicized
Which is a more likely cause of death in the United States: being killed by falling airplane parts or being killed by a shark?
Airplane= 30 X greater
Availability Heuristic
Relying only on our own knowledge or experience to judge likelihood.
Whatever is readily available (in the situation or our memory) will dictate how we answer.
Ex. If a minority person is convicted of a heinous crime, many people will distrust other members of the same minority.
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The Availability Heuristic
Causes of Death
Lung Cancer vs Motor Vehicle Accidents
Emphysema vs Homicide
Tuberculosis vs Fire and Flames
From each pair, choose the one you think causes more deaths in the US each year.
The Availability Heuristic
| Causes of Death | People’s Choice | Annual US Totals | Newspaper Reports/Year |
| Lung Cancer | 43% | 140,000 | 3 |
| Vehicle Accidents | 57% | 46,000 | 127 |
| Emphysema | 45% | 22,000 | 1 |
| Homicides | 55% | 19,000 | 264 |
| Tuberculosis | 23% | 4,000 | 0 |
| Fire and Flames | 77% | 7,000 | 24 |
Problems
Makes us afraid/hyperaware of relatively safe events:
Can cause us to lose sight of the real dangers
Can make us not seek out disconfirming evidence
Often based on irrational or incomplete data
Related to this
The simulation bias: estimate likelihood based on how easy it is to visualize
The Representative Heuristic
I flip a quarter 6 times. Your job is to bet on the pattern of heads and tails that will result from the 6 tosses. Which of the following three outcomes would you bet on?
H-T-H-T-T-H
H-H-H-T-T-T
H-T-H-T-H-T
The Representative Heuristic
Which is more likely to occur?
Representativeness Heuristic
The belief that any member of a category should look like a member of that category
Typical image (college instructor)
Therefore, you have a set image of what all instructors should be like.
If you have an instructor that is NOT like image, that person is not “representative” of instructors just an exception
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Irrational thought processes
Wishful thinking: The Pollyanna principle
We want things to go our way
Bad stuff won’t happen, good stuff will
We don’t assess risk accurately
Superman Syndrome
Making a decision in reaction to someone else offering input
Entrapment
When you feel “stuck” because of a previous investment
Fred has a breaking down car. He’s already replaced the muffler, brakes, and ignition system. THEN, he finds out he needs to replace the transmission.
Does he buy a new car or just replace the transmission?
Most in this situation will just replace the transmission.. “I’ve already spent so much money repairing things.. Might as well..
Calling for some information and being put on hold.
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Reciprocity
“Returning the favor”
Samples in stores.
You are much more likely to buy a product if you are given a free sample than if you aren’t.
People seem to think you “owe” something back for taking the free sample, so they buy the product (or something else to “even the score”)
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Liking
People will base selection based on positive characteristics.
I like that! So, I want it.
Car shopping: That one looks so nice! Let’s get it!
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Mere Exposure Effect
Prior experience (no matter how short or trivial) creates a sense of familiarity, which can enhance your liking for something.
Myron Jones
John Adams
Victor Light
Most will choose John Adams because the name sounds more familiar.
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Mere Exposure Effect
Advertising: Super Bowl! Companies spend lots of money to advertise during the Super Bowl.
So many are watching, all you have to do it get it seen, and people are more likely to buy your product.
http://www.youtube.com/watch?v=owGykVbfgUE
Emotional States
Emotions play an important part of how we respond
Would you ask your boss for a raise if you knew she just had a fight with her husband?
Would you ask someone for a favor if you knew they were sad? Or wait until they were in a happy mood?
Mindlessness
A lot of decisions are mindless and not based on conscious thought about what we are doing
Think of automatic or non-directed thinking
Driving home.
Automatically take the correct route without thinking
