Decision Making & Reasoning

8/12/2019 Decision Making & Reasoning

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Reasoning and DecisionMaking


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Thinking

Ways of thinking

Analysis breaking down a large complex problem intosmaller simpler problems

Synthesis combining two or more concepts into acomplex form

Divergent thinking generating many ideas or possiblesolutions to a problem

Convergent thinking choosing the best solution or ideaof a possible many


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Categories of thinking processes

Problem solving developing a solution to aproblem situation

Judgments and decision making involves

making choices

Reasoning drawing conclusions given specificinformation

Creativity production of original thoughts andideas


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Reasoning


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Two basic processes in reasoning

1. A process that uses existing knowledge toreason or make decisions about new situationsand information acquired during newexperiences.

Top-down process

Errors can lead to top-down errors

2. A process that determines what new

information is relevant to reasoning and decisionmaking

Confirmation bias


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Reasoning and Logic

Two forms to be covered:

Syllogisms a 3-statement logical form, the

1sttwo parts state premises or statementsassumed to be true, and the 3rdpart is aconclusion based on those premises

Conditional reasoning a logical determinationof whether evidence supports, refutes, or isirrelevant to the stated if-then relationship


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Syllogisms

Abstract: All members of category A are members of category B. All members of category B are members of category C Therefore, all members of category A are members of

category C

More concrete example: All psychology students are intelligent All intelligent people are rich Therefore all psychology students are rich

Use of a Venn diagram to determine accuracy ofconclusion


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Conditional Reasoning

An if then statement where the if part isthe antecedent and the then statement isthe consequence If the antecedent is true, the consequence is

true, or

If the antecedent exists, the consequenceexists

Two types of valid inferences Modus ponens

Modus tollens


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Modus Ponens

Affirming the antecedent to be true

Valid inference:

If a person is intelligent, then they are rich.

Mary is intelligent, she is rich

Invalid inference: negating the antecedent

Mary is notintelligent, she is not rich. Wrong

An easier example:

If one kills a lawyer, then she is dead.

Valid: John killed a lawyer, she is dead

Invalid: John did not kill a lawyer, she is not dead


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Modus Tollens

Concerned with the consequence worksopposite to modus ponens

If you kill a lawyer, then she will be dead Invalid inference confirming the consequence

The lawyer is dead, therefore you killed her

Valid inference negating the consequence

The lawyer is not dead, therefore you didnt kill her


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Other examples

If one is intelligent, then one is rich

1. John is rich, therefore he is intelligent

Invalid not all rich people are intelligent

2. John is not rich, therefore he is not intelligent Valid

3. John is intelligent; he is rich

Valid

4. John is not intelligent; he is not rich

Invalid- you do not have to be intelligent to berich


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Problem with the confirmation bias

Problem is we tend to want to affirm ordeny the antecedent and ignore theconsequence

Example: Wasson card problem

Test rule :If a card has a vowel on one side,then it has to have an even number on the

other side.

2ndrule: If a letter is sealed, then it has tohave a 50cent stamp


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Problem with the confirmation bias


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Decisions and Judgments


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Decisions under situations of certainty

You have all the necessary information to make acorrect decision

Frequently studied decisions about physicaldifferences

Our decisions about which stimulus is the brightest ,smallest, heaviest, etc. depends upon factors other thanthe physical difference between them

Example: The determination of which of 2 lights isbrightest depends upon the physical difference, but alsothe absolute brightness of the light, the brightness ofthe background, and how long the lights were visible


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Distance or discrimination effect

The greater the distance or differencebetween two stimuli being compared, thefaster the decision about their differences

Symbolic distance effect comparisonsbetween two symbols that represent twostimuli like drawings Differs from distance effects in that it requires

semantic and other memory processes

Semantic contiguity effect


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Examples


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Judgment and decision making in

situations of uncertainty

The individual is not given all theinformation necessary to be certain of theanswer and has to use previously acquired

knowledge

Primary problem: lack of knowledge andmisinterpretation


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Utility Maximization Theory

Humans attempt to make decisions thatprovide us with the maximum gain

Subjective utility theory modificationthat takes into consideration that humansare not always objective, but takeconsider subjective factors


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Examples of Subjective factors

Satisficing we do not always pursue theoptimal decision, but accept one that isadequate

Immediate benefit versus delayed rewarddiscounting delayed rewards

The way the problem is framed(presented) is important


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Example 1 of framing

You go to New York and decide to go to aBroadway play. You buy a ticket for $100 in themorning, but when you go to the theater thatevening, you discover you have lost the ticket.

You have plenty of money to buy another one:do you?

You go to New York and decide to go to aBroadway play and tickets cost $100. You go to

the theater that evening and when you start topay for your ticket, you discover you have lost$100. You have plenty of money to buy a ticket:do you?


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Example 2 of framing

Subjects has to make 2 decisions:

Decision 1:

A. A sure gain of $240 or B 25% chance of winning $1000 and a 75%

chance of winning nothing

Decision 2:

C. A sure loss of $750 or D. 75% chance of losing$1000 and 25%

chance of losing nothing


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Possible outcomes

A and C:

A sure loss of $510

B and D:

75% chance of losing $1000 and only a 25% chance of

winning not good odds

A and D:

$240 - $1000 = -$760

$240 - $0 = +$240

B and C: $1000 - $750 = +$250

$0 - $750 = -$750


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Use of algorithms

A specific solution procedure that if used correctlyguarantees a correct solution

Identify all possible solutions and try each oneuntil you find the one that works

The use of Algorithms is nottrial and error

Addressed in more detail in problem solving


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Heuristics

A rule of thumb strategy usually a shortcut that generally works in mostsituations, but doesnt guarantee a correct

solution


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The Representative Heuristic

Definition: a judgment rule in which anestimate of probability or likelihood of anevent is determined by one of two

features: How similar the event is to the population of

events it came from, or

Whether the event seems similar to the

process that produced it


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Examples

A town has 2 hospitals. In 1, about 45 babiesare born each day, and only 15 are born in theother each day. On the average 50% of allbabies are boys. Though not necessarily on

every day. Across 1 year the hospitals recordedthe number of days on which 60% or more of thebabies born were males.

Which hospital had more of these days or werethey have the same number of these days?


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Example 2

You flip a coin 6 times. Given that flippinga fair coin is random ( a 50 -50 chance ora head or tail). Which of the following

outcomes is most likely or probable? A. HHTHTT

B. HHHTTT

Both are equally likely the probability is

same on each toss.


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Example 3the use of stereotypes

There are 100 people in a room, 70 of them are lawyers, 30are engineers.

Bill is randomly selected from this room. What is theprobability he is a lawyer?

Dick is a 30-year-old man. He is married with no children.A man of high ability and high motivation he promises to bevery successful. He is well liked by his colleagues.

Jack is 45-years-old, and married with 4 children. He tendsto be conservative, careful, and ambitious. He shows littleinterest in political and social interests, and enjoyscarpentry, sailing, and mathematical puzzles.


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Ignoring Base Rates

Why are more graduates first-born than second-born?

Why do more hotel fires start on the 1stten floors than thesecond ten floors

In baseball why are more runners thrown out by pitcherson 1stbase than 2ndbase?

Frank is a meek and quiet man whose only hobby is playingchess. He was near the top of his college class andmajored in philosophy. Is he a librarian or a business man?

Youve watched a coin toss come up heads 5 times in arow. If you bet $100 on the next toss, would you chooseheads or tails?


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Availability Heuristic

A judgment rule in which ones estimatesare influenced by the ease with whichrelevant examples can be remembered

General world knowledge Are there more words in the English language

that begin with R or have an R as the 3rdletter?

GM sells more Chevrolets than Cadillacs. Forevery Cadillac it sells how many Chevroletsdoes it sell?


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Other availability heuristic biases

Familiarity Bias Tversky and Kahneman(1973)

Subjects given list of 39 names, 19 womens

names and 20 names of men Group 1 asked to recall all the names on the

list; group 2 asked to determine if the list hadmore womens names or mens names

Salience and vividness biases


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Simulation heuristic

A judgment rule that involves a mentalconstruction or imagining of outcomes, aforecasting of how some event will turn

out or how it might have turned outdifferently under another set ofcircumstances

Undoing heuristic

Hindsight bias Blaming the victim


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Blaming the victim

Paul normally leaves work at 5:30 and drivesdirectly home. One day, while following hisroutine, Paul is broadsided by a driver whoviolated a stop sign and is seriously injured.

Paul, feeling restless at work, leaves early to seea movie. He is broadsided by a driver whoviolated a stop sign and is seriously injured.

Paul receives an emergency call to return home.While driving home, Paul is broadsided by adriver who violated a stop sign and is seriouslyinjured.


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Limited knowledge as a limitation in

reasoning

People who keep pushing an elevatorbutton to make it come faster

Nave physics understanding principles ofmotion

Limitations in processing resources What is the answer to 8X7X6X5X4X3X2X1

What is the answer to 1X2X3X4X5X6X7X8


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Group decision making

3 frequent errors

Group think

Incremental-decision making

Content error

l f i i


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Development of reasoning in young

adults

Relativistic reasoning

Dialectic reasoning

Systematic reasoning

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Decision Making & Reasoning

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