Cognitive Psychology, 2nd Ed.

1
Cognitive Psychology, 2nd Ed.

• Chapter 14
• Reasoning and Decision Making

2
Syllogistic Reasoning

• Valid deductive conclusions necessarily follow
  from the premises.
• All A are B (All professors are birds)
• All B are C (All birds are aliens)
• All A are C (All professors are aliens)

3
Syllogistic Reasoning

• Most syllogistic forms are invalid
• All A are B
• Some B are C
• Some A are C? Not necessarily!
• No A are B
• No B are C
• No A are C? Not necessarily!

4
(No Transcript)
5
(No Transcript)
6
(No Transcript)
7
Cognitive Constraints

• Working memory limits the number of alternatives
  considered.
• Illicit conversion misinterpreting All A are
  B to mean All B are A.
• Belief bias humans in diverse cultures accept
  conclusions as valid when they fit cultural
  beliefs.

8
Conditional Reasoning (If P, then Q)

• Affirming the antecedent (P)
• Denying the consequent (not Q)
• Denying the antecedent (not P)
• Affirming the consequent (Q)

9
(No Transcript)
10
(No Transcript)
11
Modus TollensDenying the Consequent

• If a card has a vowel on one side, then it has an
  even number on the other side. 4 turn over the
  7.
• Catch the cheater in a social situation!
• beer-16, beer-21, soda-16, soda-21
• If the person is drinking beer, then she is over
  21.
• beer soda 21 16

12
Expected Utility Theory

• Bet 1 Win 8 with odds 1/3
• 8 X 1/3 2.67
• Bet 2 Win 3 with odds of 5/6
• 3 X 5/6 2.50
• Expected utility greater for Bet 1,
• most people select Bet 2.

13
(No Transcript)
14
Subjective Utility Curve

• Value (subjective utility) increases slowly for
  gains.
• Implication Further and further gains, dont
  make people as happy as going from zero to a
  small gain.

15
Subjective Utility Curve

• Value (subjective utility) decreases rapidly for
  losses but then begins to level out.
• Implication Initial losses are the most
  painful. Very heavy losses, on the other hand,
  are tolerated better than one might expect.

16
(No Transcript)
17
Stock Market Behavior

• Buyers regret--reference point is often lowered
  right after purchasing a stock, increasing the
  perception of risk (paid 50, but now only think
  its worth 45a small loss).
• The buyer is risk averse and the small loss looks
  too large to keep the stock in the portfolio for
  long. Even a winning stock can look too risky to
  keep.
• A losing stock, on the other hand, puts one into
  the risk tolerant region. Losers are held too
  long.

18
Estimating Probabilities

• Overestimates of low frequency events
• (note insurance premiums take into account
  this error).
• Underestimates of high frequency events.
• (note works against those engaged in
  risky behavior with high probability, negative
  consequences).

19
(No Transcript)
20
Representativeness Heuristic

• Typical events of a category are seen as more
  probable (e.g., HTTHHT gt HHHTTT).
• Law of small numbersmistakenly expect small
  samples to mirror population statistics and the
  Gamblers Fallacy.
• Conjunctive Fallacy Pr (AB) gt Pr (A)

21
(No Transcript)
22
Availability Heuristic

• Events easily retrieved from memory must be
  highly probable.
• Problem lies in factors that make events stand in
  memory (e.g., distinctiveness,
• emotional salience, frequency of
  encoding/retrieval).

23
(No Transcript)
24
Simulation Heuristic

• Construction of a mental model that explains an
  event makes it seem probable.
• Hindsight biasI knew it all along.

25
(No Transcript)
26
(No Transcript)