Chapter 12: Decision Making

Joel Cooper

University of Utah

Try It!• Write your name on a piece of paper and indicate the truth of

the following statements– 1 means you are sure it is true, 10 means you are sure it is false

 

Truth Rating

1. Martin Luther King was 39 when he died.  

2. The gestation period of an Asian elephant is 225 days.  

3. The earth is the only planet in the solar system that has one moon.  

4. The number of lightning strikes in the United states per year is 25 million.  

5.The Rhöne is the longest river in Europe.  

Collect the sheets.

Try It Answers

• Martin Luther King was 39 when he died• The gestation period of an Asian elephant is not

225 days--It is 645 days• The earth is the only planet in the solar system

that has one moon. False, Pluto also has one moon

• The number of lightning strikes in US is approximately 25 million

• The Rhöne is not the longest river in Europe

Decision Making

• 2 DM models– Prescriptive models– Descriptive models

• Cognitive psychologists are interested in how people actually make decisions

Classical Decision Theory

• Assumptions – All options known– Pros/Cons understood– Rationally chose– Goal: maximize value

Howard’s Dilemma• Thagard & Milgram (1995)

“An eminent philosopher of science once encountered a noted decision theorist in a hallway at their university. The decision theorist was pacing up and down, muttering, ‘What shall I do? What shall I do?’

‘What's the matter, Howard?’ asked the philosopher.

Replied the decision theorist, ‘It's horrible, Ernest I've got an offer from Harvard and I don't know whether to accept it.’

‘Why Howard,’ reacted the philosopher, ‘you're one of the world's great experts on decision making. Why don't you just work out the decision tree, calculate the probabilities and expected outcomes, and determine which choice maximizes your expected utility?’

With annoyance, the other replied, ‘Come on, Ernest. This is serious.’ ”

Subjective Utility Theory

• Goal – Seek pleasure and avoid pain– Decision utility is subjective

Satisficing

• Just good enough

• Term introduced by Herbert A. Simon in his Models of Man 1957 – Bounded rationality

Elimination by Aspects

• Tversky (1972)– Start w/ many options– Determine the most important attribute – select a cutoff value for that attribute– All alternatives below cutoff are eliminated– Repeat until one remains

Heuristics Influencing Decision Making

• Representativeness• Availability• Anchoring & adjustment • Overconfidence• Illusory correlation• Hindsight bias• As if• Confirmation Bias• Framing• Mental Representation

Representativeness Heuristic

Judgments strategy in which we make estimates on how similar (or representative) an event is to its population.

Coin toss: Which is more representative?HHHHHTTTTTHTHTHTTHHT

Representativeness Heuristic

Frank is a meek and quiet person whose only hobby is playing chess. He was near the top of his college class and majored in philosophy. Is Frank a librarian or a businessman?

Consistent with librarian stereotype, but there are many more businessmen, so base rates make it much more likely that Frank is a businessman.

Base-rate Information

• The actual probability of an event– Librarians, business men?

• Much research in the 1970’s &1980’s seemed to indicate that base rate information in these type of problems were ignored

• Current research focuses on when participants do attend to base rates

Representativeness Heuristic

• Judge probability of an event based on how it matches a prototype

• Can be accurate • Can also lead to errors• Most will overuse representativeness

– i.e. Frank’s description fits our vision of a librarian.

Gamblers Fallacy

Suppose you are at a roulette wheel and the last 8 spins have come up red.

Do you bet on red or on black for the next spin?

Red and black equally likely -- no statistical reason to select red over black (or visa versa).

Availability Heuristic

The ease of bringing an example to mind is a means of estimating the probability of occurrence (likelihood)

Frequent events will be easy to recall

Rare events will be difficult to recall

Bias -- tendency to overestimate rare events- Lightening Strikes, JAWS, Gambling

I won 5 bigagillion-zinllion-million!

You could be next!

Availability Heuristic

In the English language, are there more words beginning with the letter K or more words with K in the third position?

People often report 2 x as many words beginning with K

But there are many more words with K in the third position than in the first.

Making Decisions

• Which are you more afraid of?– Flying in an airplane– Driving in a car

• Meyers (2001)– 37 times safer per passenger mile in planes than motor

vehicles» Air Transport Association 1995-1999

Schwartz (1991)• Manipulated how many instances participants

had to give of previously being assertive – Group 1: Recall 6 examples of personal

assertiveness – Group 2: Recall 12– How assertive are you on a scale of 1 X– Group 1 more assertive than group 2– attributed (by researcher) to the availability heuristic

Anchoring Heuristic

Early and late evidence given more weightU shaped function

Anchoring-and-Adjustment

• People are influenced by an initial anchor value

• Anchor value may be unreliable, irrelevant, and adjustment is often insufficient

• Auntie L’s rent

Anchoring-and-Adjustment

• Calculate the following problems:– 1 x 2 x 3 x 4 x 5 x 6 x 7 x 8=– 8 x 7 x 6 x 5 x 4 x 3 x 2 x 1=

• The order of presentation for these two groups had a significant impact on their estimates

• The correct answer, in both cases, is 40,320!

512 2,250

Car for Sale

• Clean• Fuel efficient• Dependable• Slight rust• High mileage

• High mileage• Slight rust• Dependable• Fuel efficient• Clean

Overconfidence

• People tend to have unrealistic optimism about their abilities, judgments and skills

• Examine your confidence judgments about future events asked on a previous slide—are you confident your judgments are accurate?

Try it again…Predict your past answer

 

Your past answer

1. Martin Luther King was 39 when he died.  

2. The gestation period of an Asian elephant is 225 days.  

3. The earth is the only planet in the solar system that has one moon.  

4. The number of lightning strikes in the United states per year is 25 million.  

5.The Danube is the longest river in Europe.  

1 means you were sure it was true 10 means you were sure it was false

Illusory Correlations

• An illusory correlation is a perceived relationship that does not in fact exist

• Two events, bound together– Redelmeier and Tversky (1996) – 18 arthritis patients observed over 15 months– The weather was also recorded– Most of the patients were certain that their condition was

correlated with the weather– The actual correlation was close to zero 

• What illusory correlations may affect your decisions?• Wash the car… Bam!

Demonstration- Future events

• Predict whether you will experience these events this semester

1. Obtain an A in your favorite course.2. Have an out-of-town friend visit you.3. Lose more than ten pounds.4. Drop a course after the 5th week.5. Be the victim of a crime.6. Get a parking or speeding ticket.

• How confident are you of your judgment for each item? (100%, 80%, 60%.....)

Dunn & Story (1991)

• Examined overconfidence of students– At beginning of the semester students were

given 37 items like the ones on the previous slide

– At end of the semester, students were asked to indicate which events had actually occurred

Dunn & Story (1991)

• Students tend toward overconfidence• Confidence influences decisions, yet our

confidence may be unrealistic• Why is this a problem?

Hindsight Bias

• The memory of how we acted previously changes when we learn the outcome of an event

• Dating

“As If” Heuristic

When several sources of evidence with different reliability are presented, people tend to treat all cues “as if” they had the same reliability

Jurors, Nurses, Military

Manifestation of cognitive simplification

Confirmation Bias

Subjects focus on positive evidence

Hypothesis-driven behavior

Cognitive tunnel vision

Tend to ignore negative evidence (even though equally diagnostic)

+Evidence

Decision Making

Which cards do you need to turn over to obtain conclusive evidence of the following rule:

A card with a vowel on it will have an even number on the other side

E K 4 7X X

• If under 21 then beerless

• 19,22,nothing,beer

Decision Making

Answer:E -- search for positive evidence7 -- search for negative evidence

4% search for positive & negative evidence33% say E only (missing negative evidence)46% say E & 4

Framing

• Rönnlund, Karlsson, Laggnäs, Larsson, & Lindström (2005) – Examined the impact of framing on

risky decisions – Manipulated age (young/older) and

type of framing (positive/negative) – Participants read one of 3 scenarios– Participants selected either a risky or

certain outcome

Sample Scenario• Suppose you have invested in stock equivalent to the sum of

$60,000 in a company that just filed a claim for bankruptcy. They offer two alternatives in order to save some of the invested money:

• Positive Framing– If Program A is adopted, $20,000 will be saved (certain

outcome)– If Program B is adopted, there is a 1/3 probability that

$60,000 will be saved and a 2/3 probability that no money will be saved (risky outcome)

• Negative Framing– If program A is adopted $40,000 will be lost (certain outcome)– If program B is adopted, there is a 1/3 probability that no

money will be lost, and 2/3 probability that $60,000 will be saved (risky outcome)

Rönnlund, et.al. ResultsPe

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Type of Framing

Symbolic Comparison

Which is bigger:An elephant or a whale?An ant or a termite?A bee or a goat?A whale or a goat?A rabbit or a cat?

Symbolic Distance Effect

1 vs 2? 1 vs 5?1 vs 9?

As the difference increases, time to make decision decreases

Congruity Effect

Which is smaller: 1 vs 2? (faster)Which is larger: 1 vs 2? (slower)

Which is smaller: 8 vs 9? (slower)Which is larger: 8 vs 9? (faster)

When there is a congruity between the instructions and the symbols, decisions are faster and more accurate

Mental Representations

Mental representations are not linear- large differences are compressed so that 1 vs 2 is a “bigger difference” than 8 vs 9

Car $5,000 vs $7,000 House $155,000 vs $157,000

Which deal are you most likely to accept?

Chapter 13: Human Intelligence

What Do You Consider Intelligence?

Intelligence Is…

• Capacity to learn from experience

• Ability to adapt to different contexts

• The use of metacognition to enhance learning

Emotional Intelligence

• Mayer & Salovey (1997) “The capacity to reason about emotions, and of emotions to enhance thinking. It includes the abilities to accurately perceive emotions, to access and generate emotions so as to assist thought, to understand emotions and emotional knowledge, and to reflectively regulate emotions so as to promote emotional and intellectual growth”

Social Intelligence

• Ability to get along with others

• Knowledge of social matters

• Insight into moods or underlying personality traits of others

Historical Trends

• Emphasize psychophysical abilities– Galton– Examine relationships of sensory abilities

(psychometrics)• Weight/Light discrimination

• Emphasize on judgment – Binet (1904)– Identify children needing special instruction – Compared child’s abilities to what the average

child at that age could do

Historical Trends

• Terman (1900s)– Created an English version of Binet’s

test (called it the Stanford-Binet)– Created the intelligence quotient– IQ = MA/CA * 100

• 6/4 * 100 = 150!• 20/40 * 100 = 50!

– Became the first modern “intelligence” test

Types of items on the Stanford-Binet

Age Task

4 Fill in the missing word when asked, "A puppy is a dog, a kitten is a _______.

9Answers correctly when the examiner says, “Yesterday, the scientist went into the swamp to capture a dinosaur. What is foolish about that?

12 Fills in the missing words of sentences like "The rivers are flooding because…."

Adult Can describe the difference between happiness and elation, and virtue and morality.

Wechsler Intelligence Scales

• Wechsler created scales for adults, children, and preschoolers

• Yield 3 scores– Verbal score– Performance score– Overall score

• Most widely used intelligence test

• Infinite complexity a single number!

Types of Items on the Wechsler

Verbal Scales Performance Scales

Information Picture completion

Digit span Picture arrangement

Vocabulary Block design

Arithmetic Digit symbol

Comprehension Object assembly

Similarities  

Could culture play a role in this?

Nature, Nurture, or Both?

• Is intelligence genetic?

• Is intelligence acquired?

• Is intelligence a combination of both?

Nature and Nurture

Relationship CorrelationIdentical twins reared together .86

Identical twins reared apart .72

Fraternal twins reared together .60

Siblings reared together .47

Siblings reared apart .24

Biological parent and child living together .42

Biological parent and child, separated by adoption .22

Unrelated children living together .32

Adoptive parent and adopted child .19

Confounds

• Twins suffer from prenatal disease together

• Twins are not often separated at birth

• Adoption agencies seek similar living environments for twins

• Physical appearance, metabolic rates, resistance to disease, physique etc. etc.

Factor Analysis

• Primary method used to describe intelligence structure

• Correlations among many dependent variables are examined

• How many different factors are needed to explain the pattern of relationships among these variables?

Factor Analysis Matrix

  Reading Numerical Visual

Paragraph comprehension 0.84 0.10 0.06

Sentence completion 0.86 -0.05 -0.01

Word meaning 0.81 0.04 -0.02

Counting dots 0.08 0.91 0.04

Identifying shapes 0.02 0.82 0.10

Multiplication -0.24 0.87 -0.02

Paper folding 0.05 0.20 0.77

Block patterns -0.03 -0.01 0.65

Series completion 0.02 0.04 0.57

Number of Factors in the Structure of Intelligence

• Spearman says two• Thurstone says seven• Guilford says 150• Cattell, Vernon, and Carroll propose

hierarchical models

Spearman’s “g” Factor

• Two-factor theory of intelligence– All intellective functioning was due to an

overall mental ability – “g”– Accompanied by specific abilities for differing

mental tasks

Thurstone’s 7 Primary Mental Abilities

• Verbal comprehension

• Verbal fluency

• Inductive reasoning

• Spatial visualization

• Number

• Memory

• Perceptual speed

Guilford

• SOI Model– Structure of

Intelligence– Each cube represents

an intersection of operations, products and contents to create 150 components of intelligence

Cattell’s Fluid and Crystallized Intelligence

• Fluid intelligence– Ability to reason and use information– Peaks approximately at age 20

• Crystallized intelligence– Acquired skill and learned knowledge– Continues to increase into old age

Historical Trends & Intelligence

• In the past, focus was on the product, identify aptitudes, measure, and create models based on data

• During 1960’s & 1970’s conceptualization changed to what are the processes involved?

• Information processing models focus on the processes that are involved in intelligence

Information Processing & Intelligence

• Inspection time– How long a stimuli has to be viewed before

an accurate judgment can be made– How quickly a person gives their answer is

irrelevant, participants are encouraged to take their time

Inspection Time Demonstration

*

Inspection Time and IQ

• Nettlebeck & Lally (1976)– First to note the relationship

• Nettlebeck (1987) – Inspection time accounts for 25% of IQ

variance (r = -.5)– The higher the IQ, the less stimulus time

needed to accurately inspect the stimuli– Big issue now is direction of causation

between the two variables

Intelligence and Other Processes• The speed at which we process thought can

explain why one individual is more intelligent than another

• Choice Reaction Time– Jensen

• Lexical Access Speed– Hunt – Speed of word retrieval

Working Memory & Intelligence

• Being able to store and manipulate information in working memory is related to level of intelligence

Componential Analysis• This approach involves identifying the steps in complex

information-processing tasks and seeing how each process contributes to the decision

• Sternberg’s componential analysis on solving analogiesRed : Stop :: Green : ____

Graceful: Clumsy :: late : _____– Encode - Identify each term of the problem– Inference - Discover rule between 1st two terms– Mapping - Map rule to second set of terms – Application - Apply relationship and generate final term

Sternberg’s Findings

• Measured amount reaction time for each step

• Found more intelligent participants took longer to encode, but less time to complete the remaining steps

• Global versus local planning

Contextualist View of Intelligence

• Culture and definition of intelligence are intertwined

• Differs from one culture to another

• Critical in one culture may be unimportant in another culture

• Measurement of intelligence will be influenced by culture

Evidence Supporting Cultural Influences

• Italian Americans’ IQ study– First generation median = 87– Ceci (1996) Italian Americans

scores were slightly above average (above 100)

– Cultural assimilation is the explanation

Gardner’s Multiple Intelligences

• Eight types of abilities that are independent of one another– Visual / Spatial Intelligence– Musical Intelligence – Verbal Intelligence – Logical/Mathematical Intelligence– Interpersonal Intelligence – Intrapersonal Intelligence – Bodily / Kinesthetic Intelligence – Naturalist Intelligence

• So what is IQ a measure of ?

Gardner’s Theory

• Is modular, each type is independent of another

• Allows for existence of savants