MODULE 8

• Decision-making is a high-level cognitive process based on cognitive processes like perception, attention, and memory.
• Reasoning has been defined as the process of drawing conclusions (Leighton, 2004) and as the cognitive processes by which people start with information and come to conclusions that go beyond that information (Kurtz et al., 1999).
• Judgment and decision-making


  These are used to select from among choices or to evaluate opportunities. Afterward, we consider various forms of reasoning. The goal of reasoning is to draw conclusions, either deductively from principles or inductively from evidence.
• Deductive reasoning


  A psychological process that helps you make decisions and solve problems. In deductive reasoning, you use general ideas or premises to come to a specific conclusion. Your brain drives deductive reasoning.
• Inductive reasoning


  A form of reasoning that takes specific knowledge, through observation and experience, and then creates a general conclusion.
• Inductive reasoning


  This can lead to a hypothesis or theory but is not always accurate. The word most commonly used with inductive reasoning is probable.
• The earliest models of how people make decisions are referred to as classical decision theory. Most of these models were devised by economists, statisticians, and philosophers, not by psychologists. Hence, they reflect the strengths of an economic perspective. One such strength is the ease of developing and using mathematical models for human behavior.
• The Model of Economic Man and Woman


  This model assumed three things:

  1. Decision makers are fully informed regarding all possible options for their decisions and of all possible outcomes of their decision options.
  2. They are infinitely sensitive to the subtle distinctions among decision options.
  3. They are fully rational in regard to their choice of options (Edwards, 1954; see also Slovic, 1990).
• The Model of Economic Man and Woman


  The assumption of infinite sensitivity means that people can evaluate the difference between two outcomes, no matter how subtle the distinctions among options may be.
• The Model of Economic Man and Woman


  The assumption of rationality means that people make their choices to maximize something of value, whatever that something may be.
• Subjective Expected Utility Theory

  According to subjective expected utility theory, the goal of human action is to seek pleasure and avoid pain.
• According to subjective expected utility theory, in making decisions, people will seek to maximize pleasure (referred to as positive utility) and to minimize pain (referred to as negative utility).
• Gambler’s fallacy is a mistaken belief that the probability of a given random event, such as winning or losing at a game of chance, is influenced by previous random events.
• Group Decision Making


  Groups form decisions differently than individuals. Often, there are benefits to making decisions in groups.
• However, a phenomenon called “groupthink” can occur that seriously impairs the quality of decisions made. In the next sections we will explore group decision making in more detail.
• Groupthink is a phenomenon characterized by premature decision making that is generally the result of group members attempting to avoid conflict (Janis, 1971).
• Groupthink frequently results in suboptimal decision making that avoids non- traditional ideas (Esser, 1998).
• One of the benefits of group decisions is working as a group can enhance the effectiveness of decision making, just as it can enhance the effectiveness of problem solving.
• Benefits of Group Decisions

  
  

  Groups that are successful in decision-making exhibit a number of similar characteristics, including the following:

  • the group is small;

  • it has open communication;

  • members share a common mind-set;

  • members identify with the group; and

  • members agree on acceptable group behavior (Shelton, 2006).
• Janis delineated six symptoms of groupthink

  1. Closed-mindedness — the group is not open to alternative ideas.
  2. Rationalization — the group goes to great lengths to justify both the process and the product of its decision making, distorting reality where necessary in order to be persuasive.
• Janis delineated six symptoms of groupthink:

  
  

  3. Squelching of dissent — those who disagree with the group are ignored, criticized, or even ostracized.

  4. Formation of a “mindguard” for the group — one person appoints himself or herself the keeper of the group norm and ensures that people stay in line.
• Janis delineated six symptoms of groupthink:

  5. Feeling invulnerable — the group believes that it must be right, given the intelligence of its members and the information available to them.

  6. Feeling unanimous — members believe that everyone unanimously shares the opinions expressed by the group.
• Aristotle is considered the father of deductive reasoning because he introduced the basic form of deductive reasoning called the syllogism.
• A SYLLOGISM includes two statements, called premises, followed by a third statement, called the conclusion. We will first consider categorical syllogisms, in which the premises and conclusion describe the relation between two categories by using statements that begin with ALL, NO, OR SOME.
• A SYLLOGISM a threestep method of framing an argument.

  ➢ First is the Major Premise, an assumption or argument meant to be taken as fact.

  ➢ Next is the Minor Premise, another assumption/argument that serves to substantiate the Major Premise.

  ➢ Finally, a Conclusion is drawn from both the Major and Minor Premises.
• A MENTAL MODEL is an internal representation of information that corresponds analogously with whatever is being represented .Some mental models are more likely to lead to a deductively valid conclusion than are others. In particular, some mental models may not be effective in disconfirming an invalid conclusion.
• In inductive reasoning, conclusions are suggested, with varying degrees of certainty, but do not definitely follow from premises.
• Dual-process theory


  This contends that two complementary systems of reasoning can be distinguished. This provides an account of how thought can arise in two different ways, or as a result of two different processes.
• Under the dual-process theory, the associative system involves mental operations based on observed similarities and temporal contiguities.
• An associative system can lead to speedy responses that are highly sensitive to patterns and to general tendencies.
• An associative system imposes rather loose constraints that may inhibit the selection of patterns that are poor matches to the observed pattern.
• Under the dual-process theory, rule-based system which involves manipulations based on the relations among symbols.
• Rule-based system requires more deliberate, sometimes painstaking procedures for reaching conclusions.
• Rule-based system


  Through this system, we carefully analyze relevant features (e.g., defining features) of the available data, based on rules stored in memory.
• Rule-based system


  This system imposes rigid constraints that rule out possibilities that violate the rules.