Transcript Decision Making - Ms Lindstrom's Blog

Decision Making
Test Yourself: Decision Making and the
Availability Heuristic
• 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?
Answer
• In the United States, the chance of dying from
falling airplane parts is 30 times greater than
dying from a shark attack. Because shark attacks
receive more publicity and because they are
easier to imagine (after seeing the film Jaws, for
example), most people rate shark attacks as the
more probable cause of death. Since information
about shark attacks is more readily available, the
availability heuristic helps explain why people
overestimate the chances of dying in this unusual
way.
• 2) Do more Americans die from a) homicide
and car accidents, or b) diabetes and stomach
cancer?
• More Americans die from diabetes and
stomach cancer than from homicide and car
accidents, by a ratio of nearly 2:1. Many
people guess homicide and car accidents,
largely due to the publicity they receive and in
turn, their availability in the mind.
• 3) Which claims more lives in the United
States: lightning or tornadoes?
• More Americans are killed annually by
lightning than by tornadoes. Because
tornadoes are often preceded by warnings,
drills, and other kinds of publicity, the most
common answer is tornadoes. The large
amount of information about tornadoes,
coupled with the availability heuristic, leads to
the misconception that tornadoes are a more
frequent cause of death.
Heuristics
Are general problem-solving strategies that we
apply to certain classes of situations
Examples:
1. Means-ends analysis
e.g. write 30 pages essay due in one month
2. Subgoal analysis e.g. frog game
http://www.froggame.org/games/frogleap.html
In daily life we make decisions all the
time
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What to buy
Who to date
Invest money
Where to study
Work
• We have to make them – but how do we? And
what to we use to help ourselves?
Linda
o Linda is 31 years old, single, outspoken, and very
bright. She majored in philosophy. As a student,
she was deeply concerned with issues of
discrimination and social justice, and she also
participated in anti-nuclear demonstrations.
o Now, indicate which of the following hypotheses
is likely to be most true:
A: Linda is active in the feminist movement
B: Linda is a bank teller
C: Linda is active in the feminist movement and is a
bank teller
Results
 Most people choose feminist (A) and secondly bank
teller and feminist (C) and last B – bank teller
 study from 1982 done by Tversky (was a cognitive and
mathematical psychologist, a pioneer of cognitive
science) and Kahneman (is an Israeli-American
psychologist and Nobel laureate, notable for his work
on the psychology of judgment and decision-making,
behavioral economics)
 Due to illogical judgments
 B is the correct choice – because everyone who is both
a feminist and a bank teller is also simply a bank teller
Heuristics
The Representativeness heuristic – “what does it
look (or seem) like?
- we use it to infer how closely something or
someone fits our prototype for a particular concept,
or class, and therefore how likely it is to be a
member of that class. Example: Linda
The Availability Heuristics – causes us to base
judgments and decisions on the availability of
information in memory. Example: choose the
more likely cause of death: Murder or suicide?
Anchoring Bias
• Is the Mississippi river longer or shorter than
5000 miles and how long? Answered: shorter,
average: 2000 miles
• Is the Mississippi river longer or shorter than 500
miles and how long? Answered: longer, average:
1000 miles
• Correct: 2348 miles
• Where can one make use of this to gain
something?
Math to help you make your decisions!
• We are bad at making decisions. According to
science, our decisions are based on
oversimplification, laziness and prejudice.
• And that’s assuming that we haven’t already been
hijacked by our surroundings or led astray by our
subconscious!
• Horizon presents a guide to better decision making,
and introduces you to Mathematician Garth
Sundem, who is convinced that conclusions can
best be reached using simple maths and a pencil!
• http://www.youtube.com/watch?v=ul-FqOfX-t8
We gamble depending on our
perception of win
• http://www.youtube.com/watch?v=ohrJNf5le
eA&feature=related