decision - process of choosing between alternatives
Reasoning
The process of drawing conclusions
Inductive reasoning
Reasoning that's based on observation and being able to reach a conclusion from evidence
Inductive reasoning
Used to make scientific discoveries by forming a hypothesis and coming up with a solution
Used in everyday life to predict what will happen based on what we've seen or what's happened in the past
Heuristics
Mental shortcuts that are likely to provide the correct answer to a problem, but often lead to incorrect solutions
Availability heuristic
Events are more likely to be remembered based on things that are available or easily remembered in our mind
Example of availability heuristic
Gamblers remembering their wins but not their losses
Illusory correlation
A correlation that appears to exist but either does not exist or is much weaker than assumed
Representativeness heuristic
The probability of A being a member of Class B is determined by how well the properties of A resemble what's normally associated with B
Example of representativeness heuristic
Assuming someone who is 7 feet tall must play basketball
Conjunction rule
The probability of conjunction with two events cannot be higher than the probability of the single constituents of that event
Law of large numbers
The larger the number of individuals randomly drawn from the population, the more representative the resulting group will be of the entire population
My-side bias
Tendency for people to generate and evaluate evidence and test their hypotheses in a way that is biased toward their own opinions and attitudes
Confirmation bias
Tendency to selectively look for information that conforms to our hypothesis and overlook information that goes against it
Example of my-side bias
People in favor of capital punishment finding an article convincing, while those against it found it unconvincing
Deductive reasoning
Determining whether a conclusionlogically follows from a premise
Validity
(in deductive reasoning) A conclusion follows logically from its two premises, and if the two premises of a valid syllogism are true, the syllogism'sconclusion must also be true
Belief bias
Tendency to think a syllogism is valid if its conclusions are believable
Mental model approach
A specific situation represented in a person's mind that can be used to help determine the validity of a syllogism in deductive reasoning
Example of conditional reasoning problem
The Wason card problem, where a person has to determine the minimum number of cards to turn over to check if there is a vowel on one side and an even number on the other
Permission schema
If A is satisfied, then B can be carried out
Falsification principle
To test a rule, you must look for situations that falsify the rule
Mostparticipants often fail to falsify the principle, but correct responses can be greatly increased when the problem is stated in concrete everyday terms
In 1992, a study found that people may be more sensitive to situations involving permissions or regulations, and from an evolutionary perspective, being on the lookout for cheaters is important to survival
Expected utility theory
People are rational if they have all relevant information and will make a decision that results in maximum expected utility
Utility
The outcomes that are desirable because they are in the person's best interest, such as maximum monetary payoff
Incidental emotions
Emotions that are not specifically related to the decision-making process, but are related to a person's personality, genetic disposition, recent experiences, orenvironment
Opt-in procedure
Where we step up to do something, such as being an organ donor
Opt-out procedure
Where we don't want to do something unless we've requested it, such as not being an organ donor
Status quo bias
Tendency to do nothing when faced with making decisions, being okay with the status quo
Risk aversion strategy
Used when problems are stated in terms of gains
Risk-taking strategy
Used when problems are stated in terms of losses
Framing effect
Our decisions are influenced by how a decision is stated, highlighting one aspect of a situation and determining how people make their decision
Example of framing effect
Choosing beef that is 30% lean or 80% lean
Ultimatum game
People often reject low offers because they become angry that the offers were unfair
Neuroeconomics
Decisions are influenced by emotions associated with activity in specific areas of the brain
Example of neuroeconomics study
More activation of the right anterior insula, connected to emotional states, caused participants to be more likely to reject more offers
Dual systems approach to thinking
System 1 thinking is fast, automatic, intuitive, and non-conscious, while System 2 thinking is slow, deliberate, conscious, and controlled
Much of our day-to-day existence is handled by System 1 thinking, while System 2 takes over when we need to be more thoughtful
Dual process theory suggests that there are two systems involved in human thinking: System 1 (automatic) and System 2 (controlled).