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Reasoning and decision making
Reasoning
Conclusions beyond info provided
Deductive reasoning
Inductive reasoning
Decision making
Make choices
Psychology research question?
Do people think logically?
How well can people evaluate problems?
How do we represent information?
What are the biases in reasoning?
Decision making
Utility approach
If have all information, will choose most desirable outcome
Complicated what is valuable:
Not all pieces can be calculated
Potential for inaccurate mental simulations
Poor at predicting emotional reactions
Reasoning and decision making
Heuristics Bias
Representativeness heuristic
Availability heuristic
Anchoring and adjustment
Framing effect
Confirmation bias
Reasoning problem
A nearby town is served by 2 hospitals. About 45 babies are born each day in the larger hospital. About 15 babies are born each day in the smaller hospital. Approximately 50% of all babies are boys. However, the exact percentage of babies who are boys will vary from day to day. Some days it may be higher than 50%, some days lower. For a period of 1 year, both the larger and smaller hospital recorded the number of days on which more than 60% of babies born were boys. Which hospital do you think recorded more such days?
- Larger hospital
- Smaller hospital
- About the same (within 5% of each other)
Representativeness heuristic
Which outcome is more likely?
THHTHT or HHHTTT
THHTHT judged as representative of “random”
Judgment of similarity to general category
Small-sample fallacy
Hospital problem: 56% say same
Ignore law of large numbers
Descriptions change reasoning
Base-rate fallacy
Ignore statistics, decision based on descriptive information
Linda…
Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and she also participated in anti-nuclear demonstrations.
Rank the following options in terms of the probability of their describing Linda. Give a rank of 1 to the most likely option and 8 to the least likely.
Linda is a teacher at an elementary school.
Linda works in a bookstore and takes yoga.
Linda is active in the feminist movement.
Linda is a psychiatric social worker.
Linda is a member of the league of women voters.
Linda is a bank teller.
Linda is an insurance salesperson.
Linda is a bank teller and active in the feminist movement.
Conjunction fallacy
Tversky & Kahneman (1983)
Most thought teller and feminist more likely
Mathematically less likely – conjunction
Seems more appealing even though statistically less likely
0
1
2
3
4
5
Naïve Intermed Sophisticated
Bank teller
Bank teller andfeminist
Availability heuristic
Are there more words that have K in the 1st position or 3rd?
“What is more likely…” (e.g. diseases)
Availability heuristic How easily examples come to mind
Generally correct, but can lead to errors
Factors that influence: Recency, Familiarity, Knowledge
McKelvie (1997): list of m/f names 12 famous m v. 14 f: 77% report more males in list
Decision making
Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two programs have been proposed.
A: 200 people will be saved
B: 1/3 probability that 600 will be saved, but 2/3 probability that no one will be saved
Which program do you favor?
Decision making
Imagine that the US is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people.
What if 2 different programs are proposed
Opt. C: 400 people will die
Opt D: 1/3 probability that nobody will die and 2/3 probability that 600 will die
Which program do you favor?
Framing effect
Subtle changes in wording can change interpretation/decision
Tversky & Kahneman (1981) A vs. B: focus on lives “saved”
72% chose A: “risk averse”
But, if asked choose between C: 400 people will die
D: 1/3 probability that nobody will die and 2/3 probability that 600 will die
22% chose C: “risk taking”
Identical deep structures (A/B vs. C/D)
Depends on how question is “framed”
CogLab: Decision making
F’10 data: Problem 1
Imagine the country is preparing for the outbreak of an unusual disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Set 1:
Choice A: If program A is adopted, 200 people will be saved. Choice B: If program B is adopted, there is 1/3 probability that 600 people will be saved and 2/3 probability that no one will be saved. 83% choice A; 17% choice B
Set 2: If program A is adopted, 400 people will die. If program B is adopted, there is 1/3 probability that nobody will die, and a 2/3 probability that 600 people will die. 33% choice A; 66% choice B
CogLab: Decision making
F’10 data: Problem 2
Set 1: Consider the following 2-stage game. In the 1st stage there is a 75% chance to end the game without winning anything and a 25% chance to move into the 2nd stage. If you reach the 2nd stage you have a choice between the following options. Your choice must be made before the game begins. Choice A: A sure win of $30 Choice B: An 80% chance to win $45 83% Choice A; 17% Choice B
Set 2: Which of the following do you prefer? Choice A: A 25% chance to win $30 Choice B: A 20% chance to win $45 66% Choice A; 33% Choice B
CogLab: Decision making
F’10 data: Problem 3
Set 1: Imagine that you are about to purchase a jacket for $250 and a calculator for $30. The calculator salesman informs you that the calculator you wish to buy is on sale for $20 at the other branch of the store, located 20min away. Would you make the trip? Choice A: Yes; Choice B: No 17% Choice A; 83% Choice B
Set 2: Imagine that you are about to purchase a jacket for $30 and a calculator for $250. The calculator you wish to buy is on sale for $240 at the other branch of the store, located 20min away. Would you make the trip? Choice A: Yes; Choice B: No 33% Choice A; 66% Choice B
CogLab: Decision making
F’10 data: Problem 4
Imagine that you have decided to see a play and paid admission price of the $20 ticket. As you enter the theater,
Set 1: you discover that you have lost it. Would you pay $20 for another ticket?
Choice A: Yes; Choice B: No
33% Choice A; 66% Choice B
Set 2: you discover that you have lost a $20 bill. Would you still pay $20 for a ticket to the play?
Choice A: Yes; Choice B: No
100% Choice A; 0% Choice B
CogLab: Decision making
F’10 data: Problem 5
Set 1: Would you accept a gamble that offers a 10% chance to win $95 and a 90% chance to lose $5?
Choice A: Yes; Choice B: No
50% Choice A; 50% Choice B
Set 2: Would you pay $5 to participate in a lottery that offers a 10% chance to win $100 and a 90% chance to win nothing?
Choice A: Yes; Choice B: No
33% Choice A; 67% Choice B
Kahneman & Tversky (1984)
Would you accept a gamble that offers a 10% chance to win $95 and a 90% chance to lose $5?
Would you pay $5 to participate in a lottery that offers a 10% chance to win $100 and a 90% chance to win nothing?
41% gave different preferences Even though $5 is loss of gamble vs cost to play
32% said ‘no’ to 1st offer, but ‘yes’ to 2nd
Kahneman & Tversky (1984)
Choose between
A sure gain of $240
25% chance to gain $1000 and 75% chance to gain nothing
Choose between
A sure loss of $750
75% chance to loose $1000 and 25% chance to lose nothing
Kahneman & Tversky (1984)
Choose between
A sure gain of $240
25% chance to gain $1000 and 75% chance to gain nothing
Choose between
A sure loss of $750
75% chance to loose $1000 and 25% chance to lose nothing
84% (risk-averse)
16%
13%
87% (risk-seeking)
Framing: medical decisions
McNeil et al (1982) Hospital physicians asked which form of treatment for patient with lung cancer (surgical or 6wk radiation) IV: prior information (framing)
“Of 100 people having surgery, 10 will die during treatment, 32 will have died by 1yr, and 66 will have died by 5yrs. Of 100 people having radiation therapy, none will die during treatment, 23 will have died by 1yr, and 78 will have died by 5yrs.” “Of 100 people having surgery, 90 will be alive immediately after treatment, 68 will be alive after 1yr, and 34 will be alive after 5yrs. Of 100 people having radiation therapy, all will be alive after treatment, 77 will be alive after 1yr, and 22 will be alive after 5yrs.
Results: Framed in terms of dying: 44% choose radiation Framed in terms of living: 18% choose radiation
CogLab: Risky decisions
Sp ‘12
Problems
Get some additional money or lose money
Choices
Risky (probability) vs riskless choice
Hyp
When choices are gains: risk-avoiding
When choices are losses: risk seeking
Expected: % smaller for gain vs loss problems
Results: % risky choice selected
Gain: 48.5% (46% global)
Loss: 12.1% (41% global)
Tversky & Shafir (1992)
Imagine you have just taken a tough exam. It is the end of the semester, you feel tired and you find out that you
Passed the exam Failed the exam and you will have to take it again in a couple of months Won’t know the outcome of the exam for 2 more days
You now have the opportunity to buy a 5-day vacation to Hawaii at a very low price. It expires tomorrow. Would you:
Buy the vacation package? Not buy the vacation package? Pay a $5 nonrefundable fee in order to retain the right to buy the vacation at the same price the day after tomorrow?
Tversky & Shafir (1992)
Pass/fail doesn’t change % of decisions
Each individual needs to have reason for decision!
Justification process
Anchoring and adjustment
Anchor: begin with first approximation
Adjustment: changes based on added info
Multiplication problem: 5s respond
A: 8x7x6x5x4x3x2x1
B: 1x2x3x4x5x6x7x8
A grp median: 2,250
B grp median: 512
Correct answer: 40,320
Real world application
First impressions
Others?
Confirmation bias
Tendency to only gather support; ignore disconfirming evidence
Wason (1960) card task
You will be given 3 #s which conform to a simple rule. Your aim is to discover this rule. Write down #s and reasons and I’ll tell you if they conform to the rule or not.
Results: Few participants who after they were correct tried to disconfirm their hypothesis.
Lord et al. (1979)
How convincing an article is depends on prior attitude
Kuhn’s “Structure of a Scientific Revolution”
Reasoning: Bias
Framing Way alternatives are structured Consequences are the same Affects representation
Representativeness heuristic Decision based on comparison to ideal Don’t consider statistics
Availability heuristic Tendency to use answer that easily comes to mind
Anchoring and adjustment Influenced by starting point of problem
Confirmation bias Tendency to seek/use info that supports belief Belief persistence
Neuroeconomics
Economic decision making problems Examine influence of emotion (and mood) on decisions
Expected emotions (predicted) Immediate emotions: integral vs incidental Emotion determines risk aversion (impact of loss greater than gain)
Sanfey et al (2003) Ultimatum game (how to split $) IV: human vs computer partner Result: humans reject low offers b/c “unfair” Brain activity: Anterior insula activation when rejected offer
Lerner et al (2004) View film (sad, disgust, neutral) Decision conditions:
Sell: Set price to sell product Choice: price willing to choose product instead of accepting $
Result: sad/disgust grps set price lower
Neuroscience of thinking
Major area involved: prefrontal cortex (PFC)
Damage to PFC has effect on:
Planning and perseveration
Problem solving
Understanding stories
Reasoning
Application: teenagers
Why are we imperfect?
Why use heuristics?
Less effort, less to remember Economical
Faster to answer
Usually correct Effective
Reduce errors Approximation
Examples/Problems purposefully created to create “errors”
Help us understand cognitive process
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