Thinking and Deciding
University of Groningen, PSB3E-CP08
Book: Judgment and Decision Making by Nancy S. Kim
Chapter 1 - Introduction 1
Chapter 2 - Availability and Representativeness 3
Chapter 3 - Anchoring and Primacy Effects in Judgments 6
Chapter 4 - Hindsight Bias 9
Chapter 5 - Risk Perception 13
Chapter 6 - Prediction 16
Chapter 7 - Choice and Mental Accounting 18
Chapter 8 - Expected Utility Theory 22
Chapter 9 - Framing Effects and Prospect Theory 25
Chapter 10 - Schemas and Framework Theories 28
Chapter 11 - Judging Covariation, Contingency, and Cause 31
Chapter 12 - Hypothesis Testing and Confirmation Bias 37
Chapter 13 - Belief 39
Chapter 14 - Moral Judgment and Cooperation 42
Lecture 5 - Populism and Social Media 49
,Chapter 1 - Introduction
Top causes of death in such countries as the U.K., the U.S., South Korea, and Germany
are heart disease, lung cancer, and cerebrovascular disease.
→ we can work backwards to the many factors that, in combination, make each of them
occur (genetic factors, environmental conditions which cannot be helped)
→ personal decisions also play a major role contributing to these causes of death
Personal decisions = making choices that are essentially under our own control.
→ in particular, smoking, poorly regulated eating habits, and the failure to exercise regularly
increase likelihood of dying from these major categories of medical diseases
→ is said to be number one cause of premature death in the U.S. according to Keeney’s
systematic analysis (2008)
Research in cognitive science, social psychology, cross-cultural psychology, development,
neuroscience, and affective science contribute toward solving the complex puzzle of how we
make judgments and decisions.
Basic research = scientific inquiry aimed at developing new knowledge.
Applied research = scientific inquiry aimed at solving a specific problem.
Kahneman and Tversky (1974) approached the question of how people make judgments by
identifying cognitive illusions.
Cognitive illusions = systematic ways in which people make errors in subjective judgment
→ their argument was based on the analogy of the use of perceptual illusions to study visual
perception
Affect = i.e. emotion
→ can influence choice and judgments
Fast-and-frugal approach = approach by Gigerenzer and colleagues to emphasize the
ways in which people’s reasoning is actually quite effective and their judgments very often
sound
→ emphasis is on how the use of mental shortcuts is adaptive; thus how it leads to the best
balance between minimizing the costs of cognitive processing and time and maximizing the
accuracy of decisions
Computational capacity = (cognitive limitations) there is a limited amount of information we
can process at a time.
→ identifying what kinds of mental shortcuts people take to make these decisions helps to
explain how we manage to get through the world in spite of all these limitations
Dual-process models = broad group of theories suggesting that judgments and decisions
are generally carried out via two distinct kinds of mental processes (systems or types of
processing)
1. System 1: fast, intuitive, parallel automatic, emotion-driven, and/or not always
consciously accessible processing
1
, 2. System 2: cognitively taxing, deliberate, serial, controlled, reason-driven, and/or
consciously accessible processes
Sloman (1996): had one of first well-articulated arguments for two systems underlying
reasoning,
→ he suggested that one system is associative in nature: that reasoning in that system is
based on similarity and statistical information
→ the other system is rule-based: relying on either logical rules, the rules of the social or
natural world, or computer algorithms that minds might use to compute decision or
judgments
→ in contrast to other researchers at that time, he suggested that people have both
associative and rule-based system for reasoning and can operate simultaneously in same
person
Critique at dual-process model: relatively vague and poorly defined
→ the proposed attributes of each system do not always co-occur; e.g. being fast, automatic,
and unconscious does not always coincide with also processing associatively and in parallel
Evans (2008): came up with a slightly different version of the dual-process model
1. Type 1; intuitive in nature; can be carried out without working memory; includes
automatic processing and processing that is carried out by habit
→ basic affect in particular is associated with type 1 (e.g. regarding simply whether
one feels negative and positive emotion)
→ (from lecture) fast and effortless, linked to emotions, reliant on heuristics and
biases
2. Type 2; reflective in nature; tied to working memory and is therefore disrupted under
cognitive load; can be carried out in detachment from the present reality (abstractly,
hypothetically, and/or about the future)
→ more complex forms of affect may be more appropriately classified as type 2
→ (from lecture) slow and effortful; deliberate and open to introspection
→ reflect kinds of processing rather than entire systems of processing per se
3 kinds of models of decision-making:
1. descriptive models
2. normative models
3. prescriptive models
Descriptive models = attempt to describe how people actually judge and decide, without
necessarily saying what we do is good or bad.
→ dual-process models fall in this category
Normative models = reflex optimal or ideal decision-making
Prescriptive models = recommend a particular way in which people ought to judge and
decide; may reflect a compromise between normative and descriptive models
→ it may or may not be the normative way of making decisions, but it is thought to be an
improvement over what people are currently doing
2
, Chapter 2 - Availability and Representativeness
Heuristics = quick-and-easy rules of thumb that we use to make judgments under
conditions of uncertainty.
→ 2 questions by Tversky and Kahnemean
1. What are these heuristics?
2. Under what circumstances do people use them?
Bias = a systematic error in thinking in a specific direction that can result form reliance on
heuristics
→ people usually think that the outcomes of sport matches rae less random (and rarely
random) than they really are
→ people usually underestimate (and rarely overestimate) how often people lie
Availability heuristic = a person is said to employ it whenever they estimate frequency or
probability by the ease with which instances or associations could be brought to mind.
→ term is something of a misnomer
Availability = memory traces existing in the mind
Accessibility = how easily one can retrieve these memory traces to conscious awareness
Set-size judgment task = involves estimating how many individuals belong to a group or
category.
→ Tversky and Kahneman did experiment about availability heuristic and famous names
Relative frequency-of-occurrence judgment = your job is to estimate how often an event
or item occurs relative to another event or item.
→ e.g. judge whether the letter “K” appeared more often as the first letter of a word or as the
third letter of the word (in english)
Judgments of the self are strongly influenced by the availability heuristic.
Research suggests that inducing a positive or negative mood makes it easier for people
to retrieve positive or negative emotions, respectively.
People who had to recount 12 situations in which they had felt insecure and acted
unassertive, found it more difficult than people who were asked the same for 6 situations.
→ people who had to recount 6 situations rated themselves more assertive
→ thus availability heuristic influences people’s assessments of their own personalities
Lopes and Oden (1991): argued that description of availability (by Tversky and Kahneman)
could suggest either one of two hypotheses:
1. An availability-by-number hypothesis, in which we gauge how many examples we
are able to recall before making a frequency judgment
2. Availability-by-speed hypothesis: in which we gauge how easily and/or quickly we
are able to recall examples
Letter-class hypothesis = people might judge how likely a letter is to appear in the first vs a
subsequent position in a word based on the fact that it is much more common in the German
3
University of Groningen, PSB3E-CP08
Book: Judgment and Decision Making by Nancy S. Kim
Chapter 1 - Introduction 1
Chapter 2 - Availability and Representativeness 3
Chapter 3 - Anchoring and Primacy Effects in Judgments 6
Chapter 4 - Hindsight Bias 9
Chapter 5 - Risk Perception 13
Chapter 6 - Prediction 16
Chapter 7 - Choice and Mental Accounting 18
Chapter 8 - Expected Utility Theory 22
Chapter 9 - Framing Effects and Prospect Theory 25
Chapter 10 - Schemas and Framework Theories 28
Chapter 11 - Judging Covariation, Contingency, and Cause 31
Chapter 12 - Hypothesis Testing and Confirmation Bias 37
Chapter 13 - Belief 39
Chapter 14 - Moral Judgment and Cooperation 42
Lecture 5 - Populism and Social Media 49
,Chapter 1 - Introduction
Top causes of death in such countries as the U.K., the U.S., South Korea, and Germany
are heart disease, lung cancer, and cerebrovascular disease.
→ we can work backwards to the many factors that, in combination, make each of them
occur (genetic factors, environmental conditions which cannot be helped)
→ personal decisions also play a major role contributing to these causes of death
Personal decisions = making choices that are essentially under our own control.
→ in particular, smoking, poorly regulated eating habits, and the failure to exercise regularly
increase likelihood of dying from these major categories of medical diseases
→ is said to be number one cause of premature death in the U.S. according to Keeney’s
systematic analysis (2008)
Research in cognitive science, social psychology, cross-cultural psychology, development,
neuroscience, and affective science contribute toward solving the complex puzzle of how we
make judgments and decisions.
Basic research = scientific inquiry aimed at developing new knowledge.
Applied research = scientific inquiry aimed at solving a specific problem.
Kahneman and Tversky (1974) approached the question of how people make judgments by
identifying cognitive illusions.
Cognitive illusions = systematic ways in which people make errors in subjective judgment
→ their argument was based on the analogy of the use of perceptual illusions to study visual
perception
Affect = i.e. emotion
→ can influence choice and judgments
Fast-and-frugal approach = approach by Gigerenzer and colleagues to emphasize the
ways in which people’s reasoning is actually quite effective and their judgments very often
sound
→ emphasis is on how the use of mental shortcuts is adaptive; thus how it leads to the best
balance between minimizing the costs of cognitive processing and time and maximizing the
accuracy of decisions
Computational capacity = (cognitive limitations) there is a limited amount of information we
can process at a time.
→ identifying what kinds of mental shortcuts people take to make these decisions helps to
explain how we manage to get through the world in spite of all these limitations
Dual-process models = broad group of theories suggesting that judgments and decisions
are generally carried out via two distinct kinds of mental processes (systems or types of
processing)
1. System 1: fast, intuitive, parallel automatic, emotion-driven, and/or not always
consciously accessible processing
1
, 2. System 2: cognitively taxing, deliberate, serial, controlled, reason-driven, and/or
consciously accessible processes
Sloman (1996): had one of first well-articulated arguments for two systems underlying
reasoning,
→ he suggested that one system is associative in nature: that reasoning in that system is
based on similarity and statistical information
→ the other system is rule-based: relying on either logical rules, the rules of the social or
natural world, or computer algorithms that minds might use to compute decision or
judgments
→ in contrast to other researchers at that time, he suggested that people have both
associative and rule-based system for reasoning and can operate simultaneously in same
person
Critique at dual-process model: relatively vague and poorly defined
→ the proposed attributes of each system do not always co-occur; e.g. being fast, automatic,
and unconscious does not always coincide with also processing associatively and in parallel
Evans (2008): came up with a slightly different version of the dual-process model
1. Type 1; intuitive in nature; can be carried out without working memory; includes
automatic processing and processing that is carried out by habit
→ basic affect in particular is associated with type 1 (e.g. regarding simply whether
one feels negative and positive emotion)
→ (from lecture) fast and effortless, linked to emotions, reliant on heuristics and
biases
2. Type 2; reflective in nature; tied to working memory and is therefore disrupted under
cognitive load; can be carried out in detachment from the present reality (abstractly,
hypothetically, and/or about the future)
→ more complex forms of affect may be more appropriately classified as type 2
→ (from lecture) slow and effortful; deliberate and open to introspection
→ reflect kinds of processing rather than entire systems of processing per se
3 kinds of models of decision-making:
1. descriptive models
2. normative models
3. prescriptive models
Descriptive models = attempt to describe how people actually judge and decide, without
necessarily saying what we do is good or bad.
→ dual-process models fall in this category
Normative models = reflex optimal or ideal decision-making
Prescriptive models = recommend a particular way in which people ought to judge and
decide; may reflect a compromise between normative and descriptive models
→ it may or may not be the normative way of making decisions, but it is thought to be an
improvement over what people are currently doing
2
, Chapter 2 - Availability and Representativeness
Heuristics = quick-and-easy rules of thumb that we use to make judgments under
conditions of uncertainty.
→ 2 questions by Tversky and Kahnemean
1. What are these heuristics?
2. Under what circumstances do people use them?
Bias = a systematic error in thinking in a specific direction that can result form reliance on
heuristics
→ people usually think that the outcomes of sport matches rae less random (and rarely
random) than they really are
→ people usually underestimate (and rarely overestimate) how often people lie
Availability heuristic = a person is said to employ it whenever they estimate frequency or
probability by the ease with which instances or associations could be brought to mind.
→ term is something of a misnomer
Availability = memory traces existing in the mind
Accessibility = how easily one can retrieve these memory traces to conscious awareness
Set-size judgment task = involves estimating how many individuals belong to a group or
category.
→ Tversky and Kahneman did experiment about availability heuristic and famous names
Relative frequency-of-occurrence judgment = your job is to estimate how often an event
or item occurs relative to another event or item.
→ e.g. judge whether the letter “K” appeared more often as the first letter of a word or as the
third letter of the word (in english)
Judgments of the self are strongly influenced by the availability heuristic.
Research suggests that inducing a positive or negative mood makes it easier for people
to retrieve positive or negative emotions, respectively.
People who had to recount 12 situations in which they had felt insecure and acted
unassertive, found it more difficult than people who were asked the same for 6 situations.
→ people who had to recount 6 situations rated themselves more assertive
→ thus availability heuristic influences people’s assessments of their own personalities
Lopes and Oden (1991): argued that description of availability (by Tversky and Kahneman)
could suggest either one of two hypotheses:
1. An availability-by-number hypothesis, in which we gauge how many examples we
are able to recall before making a frequency judgment
2. Availability-by-speed hypothesis: in which we gauge how easily and/or quickly we
are able to recall examples
Letter-class hypothesis = people might judge how likely a letter is to appear in the first vs a
subsequent position in a word based on the fact that it is much more common in the German
3
