CHAPTER 13 Judgment, Decisions, and Reasoning

• Reasoning is the process of drawing conclusions.
• Decision is the process of choosing between alternatives.
• Inductive reasoning, which is the process of drawing general conclusions based on specific observations and evidence.
• Heuristics or “rules of thumb” that are likely to provide the correct answer to a problem but are not foolproof.
• Availability heuristic states that events that more easily come to mind are judged as being more probable than events that are less easily recalled.
• Illusory correlations occur when a relationship between two events appears to exist, but in reality, there is no relationship or the relationship is much weaker than it is assumed to be.
• Stereotypes an oversimplified generalization about a group or class of people that often focuses on the negative.
• Representativeness heuristic states that the likelihood that an instance is a member of a larger category depends on how well that instance resembles properties we typically associate with that category.
• The base rate is the relative proportion of different classes in the population.
• The conjunction rule states that the probability of a conjunction of two events.
• Law of large numbers, which states that the larger the number of individuals that are randomly drawn from a population, the more representative the resulting group will be of the entire population.
• Myside Bias is demonstrated how people can evaluate evidence in a way that is biased toward their own opinions and attitudes.
• Confirmation bias occurs when people look for information that conforms to their hypothesis and ignore information that refutes it. A type of this is the myside bias.
• Backfire effect is a person’s support for a particular viewpoint becomes

  stronger when presented with facts opposing their viewpoint.
• In deductive reasoning, we determine whether a conclusion logically follows from statements.
• The father of deductive reasoning is Aristotle.
• It consists of two broad statements. The basic form of deductive reasoning is called the syllogism.
• A syllogism consists of two broad statements, or premises, followed by a third statement called the conclusion.
• Categorical syllogisms, in which the premises and conclusion are statements that begin with All, No, or Some.
• Belief bias is the tendency to think a syllogism is valid if its conclusion is believable.
• Permission schema states that if a person satisfies a specific condition , then he or she gets to carry out an action.
• The falsification principle tests a rule, it is necessary to look for situations that would falsify the rule.
• Classic reasoning problem that is used on conditional reasoning, Wason four-card problem.
• Conditional syllogisms have two premises and a conclusion like categorical syllogisms, but the first premise has the form “If ... then.”
• This approach helped in judging the validity of syllogisms: Mental Model Approach. It was suggested by Phillip Johnson-Laird.
• A mental model is a specific situation represented in a person’s mind that can be used to help determine the validity of syllogisms in deductive reasoning.
• Expected utility theory, which assumes that people are basically rational.
• According to this theory, if people have all of the relevant information, they will make a decision that results in the maximum expected utility: expected utility theory.
• Utility refers to outcomes that achieve a person’s goals.
• Expected emotions, emotions that people predict they will feel for a particular outcome.
• Risk aversion is the tendency to avoid taking risks.
• Incidental emotions are emotions that are not caused by having to make a decision.
• Status quo bias is the tendency to do nothing when faced with making a decision.
• In an opt-in procedure, participants actively choose to participate or consent to a particular activity.
• In an opt-out procedure, participants are included by default unless they actively choose to not participate or be involved.
• Framing effect is where decisions are influenced by how the choices are stated, or framed.
• Neuroeconomics, combines research from the fields of psychology, neuroscience, and economics to study how brain activation is related to decisions that involve potential gains or losses.
• The ultimatum game involves two players, one designated as the proposer and the other as the responder.
• Dual systems approach to thinking: the idea that there are two mental systems.