Decision Making

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Decision Making

• Chapter 7

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Definition of Decision Making

• Characteristics of decision making
• Selecting a choice from a number of options
• Some information available with respect to
  choices
• Time frame is relatively long gt 1 sec
• Choice is associated with uncertinty

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Classical Decision Theory

• Normative Decision Models expected value of the
  outcome (win 50 with P .5). Optimizing choice
  from all possible.
• Descriptive Decision Models most decision
  makers violate the assumptions of normative
  decision making (optimum solution). Base
  decisions on simpler method of looking at a few
  options and selecting one that is acceptable
  (satisficing). Shifting to simplifying
  heuristics.

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Example Normative Decision

• Alternative State of Nature/Probability
  N1Dry Hole N2Sm Well N3Big Well
  Expected
• p1.6 p2.3 p3.1 Value
• A1Don't Drill 0 0
  0 0
• A2Drill Alone -500,000 300,000 9,300,000
  720,000
• A3Farm Out 0 125,000
  1,250,000 162,500

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Heuristics and Biases
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Factors Cognitive Limitations That Effect
Decision Making

• Amount or quality of cue information brought into
  working memory (WM)
• Available decision making time
• Attention Resources
• Amount quality of persons LTM knowledge
• Ability to retrieve relevant LTM information
• WM capacity limitations

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Heuristics

• Definition problem-solving by trial and error
  a method of solving a problem for which no
  formula exists, based on informal methods or
  experience, and employing a form of trial and
  error iteration

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Heuristics Biases in Obtaining Using Cues

• Attention to a limited number of cues
• Cue primacy preliminary cues tend to carry more
  weight than follow-on cues is the primacy effect.
• Inattention to later cues.
• Cue salience (noticeable) bias.
• Overweighting of unreliable cues or treating all
  cues as equal.

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Heuristic Biases in Hypothesis Generation

• A limited number of hypotheses are generated.
• Available heuristic tendency to rely on recent
  or frequent heuristic.
• Representativeness heuristic judging an event
  as likely if it represents the typical features
  of a category
• Overconfidence believing you are correct more
  often than you really are

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Heuristic Biases in Hypothesis Evaluation
Selection

• Cognitive fixation once a hypothesis is
  generated there is a tendency to ignore
  subsequent cues.
• Confirmation bias seeking out confirming
  information and not disconfirming information.

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Heuristic Biases in Action Selection

• Retrieval of a small number of actions from LTM.
• Availability heuristic for actions tendency to
  retrieve most available actions which is function
  of frequency and recency.
• Availability of possible outcomes tendency to
  base decisions on what you think are the best
  outcome consequences, not what they really are.

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Naturalistic Decision Making

• Definition The way people use their experience
  to make complex decisions in a field setting.
  Problems tend to be
• Ill-structured
• Uncertain, dynamic environments
• Information rich environment where cues change
  rapidly
• Cognitive processing with iterative/feedback
  loops
• Multiple shifting and competing goals
• Time constraints or time stress
• High risk
• Multiple persons involved in the decision

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Skill, Rule, Knowledge Based Task Performance
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More Views of Naturalistic Decision Making

• Cognitive Continuum Theory decision process
  occurs along a continuum from intuition to
  analysis
• Situation Awareness perception of elements in
  environment within a volume of time space,
  comprehension of their meaning, projection of
  their near future status
• Recognition-Primed Decision Making experts
  recognize a pattern recall a single course of
  action
• Schemas, Stories, Mental Models analytical
  processing begins with situation assessment which
  yields 2nd level situation awareness where a
  mental representation is constructed.
  Representation is called a story or mental model.

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An Integrated Model of Real-World Decision Making
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Improving Human Decision Making

• Redesign situation assessment environment for
  performance support
• Training Help people overcome heuristic biases
• Decision Aids
• Expert Systems Using computers to capture the
  knowledge of experts to provide answers to the
  decision maker
• Cognitive Support Using computers as decision
  support systems. Any interactive support system
  that helps the decision maker

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Problem Solving

• Problem solving occurs when there is insufficient
  knowledge to readily make a decision and creative
  processes are required.
• Characteristics
• Person doesnt have WM capacity
• Person doesnt have enough system knowledge
• Person has system knowledge, but it is
  disconnected unorganized
• Errors biases in problem solving (similar to
  biases in decision making)
• Poor problem definition
• Failure to generate the correct solution plan
• Limitations of WM