Cognitive Psychology

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Cognitive Psychology Chapter 11b Decisions,
Judgements and Reasoning
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12/1/2013

• Outline
• Decisions
• Availability Heuristic
• The simulation heuristic
• Counterfactual thinking
• The hindsight bias
• Anchoring and adjustment
• Framing Effects

Study Questions. What is loss aversion.
Describe the effect of combining framing effects
with loss aversion.
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Decisions

• Algorithms and Heuristics
• The Availability Heuristic
• Our estimates of how often things occurs or are
  influenced by the ease with which relevent
  examples can be remember
• This leads to a number of biases
• 1) Which is a more likely cause of death in the
  United States being killed by falling airplane
  parts or being killed by a shark?
• 2) Do more Americans die from a) homicide and car
  accidents, or b) diabetes and stomach cancer?
• 3) Which claims more lives in the United States
  lightning or tornadoes?

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Decisions

• Algorithms and Heuristics
• The Availability Heuristic
• Important factors affecting saliency
• Factors that effect the ease of remembering
• Vividness, recency, familiarity

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Decisions

• Algorithms and Heuristics
• The Availability Heuristic
• Vividness
• E.g., Gardening and the full moon.
• Repetition
• MacLeod Campbell (1992)
• Recall happy/sad events from ones past
• Higher estimates of happy events in the future
  for happy group
• Imagining
• Kahneman Tversky (1973)
• Imagining Jimmy Carter or Gerald Ford as
  President

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Decisions

• Algorithms and Heuristics
• The Availability Heuristic
• Recency
• Pauker Kopelman (1992)
• New England Journal of Medicine -
• Physician reluctant to perform a procedure
  because of a recent complication

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Decisions

• Algorithms and Heuristics
• The Availability Heuristic
• Familiarity
• Physicians ratings of likelihood of fatality of
  various diseases
• Correlated with number of articles published
  about the disease
• . Regardless of what the article said about the
  disease
• Role of media
• Population estimate of El Salvadore -gt 12 million
  (5 actual)
• Population estimate of Indonesia -gt 19.5 million
  (180 actual)
• Who has a larger population, Afghanistan or Iraq?

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Decisions

• Algorithms and Heuristics
• The simulation heuristic
• Forecasting how some event might have turned out
  under another set of circumstances
• Mr. Tees and Mr. Crane
• E.g.,Medvec et al. (1995)
• Examined tapes of 41 athletes from 92 Games
• Judges rated athletes on scales from agony to
  ecstasy
• Bronze medalists happier than silver medalists
• Counterfactual thinking
• Undoing heuristic

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Decisions

• Algorithms and Heuristics
• The hindsight bias
• I-knew-it-all-along phenomenon
• Anchoring and adjustment
• Determine the following

8 X 7 X 6 X 5 X 4 X 3 X 2 X 1
1 X 2 X 3 X 4 X 5 X 6 X 7 X 8
Kahneman and Tversky found 1) 2,250 2)
512 (Actually 10,320)
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Decisions

• Government cutbacks are about take a hit on
  students. It is expected that 600 people will
  lose their bursaries. The student union has
  proposed two alternative programs to fight the
  cutbacks
• If Program A is adopted, 200 students will have
  their bursaries saved.
• If Program B is adopted (a legal option), there
  is a one-third probability that 600 students will
  have their bursaries saved, and a two-thirds
  probability that no students will have their
  bursaries saved.
• Which program would you favour?

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Decisions

• The framing effect (Kahneman Tversky)
• The wording of question in conjunction with the
  background context can influence the decision.
• Both of the previous plans were rejected,
  consider the following
• If Plan C is adopted, 400 people will lose their
  bursaries.
• If Plan D is adopted, there is one-third
  probability that nobody will lose their bursary,
  but a two-thirds probability that 600 people will
  lose their bursary.
• Kahneman Tverskys results (disease outbreak)

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Decisions

• The framing effect (Kahneman Tversky)
• Risk seeking and avoidance
• When questions are framed in terms of gains we
  avoid risk (Prefer A over B)
• When framed in terms of losses we are
  risk-seekers (Prefer D
  over C)
• Other findings relating to the Framing Effect
• It is unrelated to statistical sophistication
• It is not eliminated when the contradiction is
  pointed out

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Decisions

• The framing effect (Kahneman Tversky)
• You buy an advance ticket for 20 to see the
  Harlem Globetrotters play at the Oland Centre.
  When you get to the game, you discover that you
  have lost your ticket. Do you shell out 20 for
  another?
• You go to the Oland Centre to see the Harlem
  Globetrotters play. Tickets cost 20. When you
  get to the ticket booth, you discover that you
  have lost twenty bucks. Do you buy a ticket
  anyway?

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Decisions

• The framing effect (Kahneman Tversky)
• T Ks results (theatre ticket for 10)
• Lose ticket - 46 buy another ticket
• Lose 10 - 88 buy another ticket
• The Framing effect has been demonstrated in a
  number of contexts
• Vaccinations
• Treating lung cancer
• Genetic counseling
• Gambling choices
• Buying refrigerators

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Decisions

• The framing effect (Kahneman Tversky)
• Loss aversion
• Receive a mug for participating in an experiment
• What price would you sell this mug for?
• What price would you pay for his mug?
• Sell 7.12, Buy 2.87
• Combining Framing effects and loss aversion

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Decisions

• The framing effect (Kahneman Tversky)
• (1) You have decided to leave your current job,
  because it is an 80 min commute each way even
  though you like the pleasant social interaction
  with your co-workers. You have two options for a
  new job
• Job A Limited contact with others 20 min commute
• Job B Moderately social 60 min commute
• Loss aversion
• We are far more sensitive to losses than to gains
• K T Receive 20 for a heads, pay 10 for a
  tails

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Decisions

• The framing effect (Kahneman Tversky)
• (2) You have decided to leave your current job,
  because it leaves you isolated from your
  co-workers even though you like the 10 min
  commute in each direction. You have two options
  for a new job
• Job A Limited contact with others 20 min commute
• Job B Moderately social 60 min commute
• Loss aversion
• Scenario (1) - 67 chose Job B
• Scenario (2) - 70 chose Job A

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Decisions

• The framing effect (Kahneman Tversky)
• Some weeks ago, you saw an add in the newspaper
  for a reduced rate for a week-end at a nearby
  resort. You sent in a 100 nonrefundable
  deposit. When the weekend arrives you set off
  with your partner. Both of you are extremely
  tired and somewhat ill and about half way to the
  resort you both realize that you would probably
  have a more pleasurable weekend at home.
• Do you turn back?
• The sunk-cost effect A tendency toward taking
  extravagant steps to ensure that a previous
  expense was not in vain.

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Decisions

• The framing effect (Kahneman Tversky)
• Implications for the legal system
• You are to decide an only-child sole-custody case.

Parent A Average income Average health Average
working hours Reasonable report with the
child Relatively stable social life
Parent B Above average income Very close
relationship with child Extremely active social
life Lots of work-related travel Minor health
problems
To whom do you award sole custody? -gt 64 Chose
Parent B To whom would you deny sole custody? -gt
55 Chose Parent B.
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Decisions

• The Fundamental Attribution Error
• The self-serving bias -gt Actor-observer
  discrepancy which holds for negative behaviour
• I did well on the exam because I work hard
• I did poorly on the exam because the professor is
  unfair
• After a college or pro sports game
• Winners 80 make internal attributions
• Losers 53 make internal attributions

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Social Cognition

• The Fundamental Attribution Error
• Above Average Effect 
• People see themselves as better than average
• e.g., driving ability, social skills, common
  sense, attractiveness
• 90 of business managers think they are better
  than their average peer
• In Australia, only 1 of people rate their job
  performance as below average
• In one survey of 829,000 high school seniors,
  zero percent rated themselves as below average in
  their ability to get along with others!
• Most people think they are better than average at
  not rating themselves better than average

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12/1/2013

• Outline
• Decisions
• Domain knowledge
• Illusory correlation
• Problems for next chapter

Study Questions. What are illusory correlations?
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Decisions

• Limitations in reasoning
• Limited domain knowledge
• Our cognitive representation of the situation
  (AKA mental model) often has incomplete
  information.
• Thermostats do not work like water faucets
• Hitting the elevator button 5 times is not faster
  than hitting it once
• 20 C is not twice as warm as 10 C
• Quasi-magical behaviour

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Decisions

• Limitations in reasoning

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Decisions

• National science foundation surveys

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Decisions

• National science foundation surveys

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Decisions

• National science foundation surveys

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Decisions

• Limitations in reasoning
• Naïve Physics and Mental Models (McCloskey et al.)

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Decisions

• Limitations in reasoning
• Results (A B)

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Decisions

• Limitations in reasoning
• Results (C)

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Decisions

• Limitations in reasoning
• Domain of knowledge
• Our domain of knowledge concerning physics is
  poor.
• Impetus theory a pre-Newtonian and incorrect
  concept concerning curvature momentum
• Linda is 31 years old, single outspoken, and
  very bright. She majored in philosophy. As a
  student she was deeply concerned with the issues
  of discrimination and social justice, and also
  participated in anti-globalization
  demonstrations.
• Rank the following in terms of their likelihood
  of describing Linda
• Linda is a teacher at a local elementary school
• Linda is a bank teller and is active in the
  feminist movement
• Linda is an insurance agent
• Linda is psychiatric social worker
• Linda is a bank teller

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Decisions

• Limitations in reasoning
• Conjunction fallacy Judging the probability of a
  conjunction to be greater than the probability of
  a constituent event.
• Chapman Chapman studies

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Decisions

• Limitations in reasoning
• Limitations in processing resources
• Waltz et al.
• Tested temporal lobe injured, prefrontal lobe
  injured, and normals
• Two tests
• Transitive Inference problems
• E.g., John is taller than Sam Sam is taller than
  Tim (2 propositions)
• Raven Standard Progressive Matrices test

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Decisions

• Limitations in reasoning
• Limitations in processing resources
• Waltz et al.

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Problems for upcoming lecture

• Complete the following Sequence
• O, T, T, F, F, S, S, E, N, .
• A Buddhist Monk leaves for a retreat atop a
  nearby mountain. He leaves at 600 AM and follows
  the only path that leads up the mountain. He
  travels quickly some of the way, he travels
  slowly, he stops for breaks. He arrives at the
  top of the mountain at 600 PM. The next morning,
  at 600 AM, he descends the mountain, again
  travelling at varying paces and with breaks. He
  arrives at 600 PM
• Is there a point on the trail that the monk
  would have passed at exactly the same time of day
  on the way up and on the way down the trail?
• Three hobbits and three orcs need to cross a
  river. There is only one boat, and it can only
  hold two creatures at a time. This presents a
  problem Orcs are vicious and whenever there are
  more orcs than hobbits they immediately attack
  and eat the hobbits. Thus, you can never let orcs
  outnumber hobbits on either side of the river.
• Can you schedule a series of crossing that will
  get everyone safely across the river?

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Problems for upcoming lecture

• Connect these nine dots with four connected
  straight lines.

Three people play a card game. Each player has
money in front of them (their ante). One each
hand of this game, one player loses and the other
two players win. The rules state that the loser
must use the money in front of them to double
the amount of money in front of each of the other
two players. They stake their antes and play
three hands. Each of them loses once and no one
goes bust. The each finish with 8.00. What were
the original antes (Hint it is not 2 each).
A landscaper has been instructed to plant four
new trees such that each one is exactly the same
distance away from each of the other trees. Is
this possible?
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Problems for upcoming lecture

• Two flagpoles are standing, each 20 meters tall.
  A 30 meter rope is strung from the top of one of
  the flagpoles to the top of the other and hangs
  freely between them. The lowest point of the rope
  is 5 meters above the ground. How far apart are
  the two flagpoles?

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Problems for upcoming lecture

• You wish to make a bracelet out of 4 chain
  pieces. It costs 1 to open a link, and 2 to
  close a link. Can you make a bracelet for under
  10?