Psychology 466: Judgment & Decision Making Psychology 466: Judgment & Decision Making Instructor: John Miyamoto 10/01/2015: Lecture 01-1 Note: This Powerpoint

Psychology 466:

Judgment & Decision Making

Psychology 466: Judgment & Decision Making

Instructor: John Miyamoto 10/01/2015: Lecture 01-1

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Outline

• General course information

• Get to know each other

• Psychology of judgment & decision making – What is it?

• Background ideas from general cognitive psychology

Psych 466, Miyamoto, Aut '15 2General Information re This Course

3Psych 466, Miyamoto, Aut '15

General Information

Instructor: John Miyamoto

Email: [email protected]

Office: 215 Guthrie Phone: 206-368-9761

Office hours: Thursday 12:00 – 1:00 in the Suzallo study room

across from the coffee shop (if you can't find me,

send me a text or phone message);

OR

make an appointment (contact by email or phone)

• UW computing provides JM with all student email addresses.

Let JM know if you use a non-UW email address.

Let JM know if you are not officially enrolled in this class.

Textbooks


Required Textbooks

• Hastie, R., & Dawes, R. M. (2009). Rational choice in an uncertain world

(2nd edition). o Amazon prices: $68.40 in paperback.

• Kahneman, D. (2011). Thinking, fast and slow. o Amazon price: $6.74 as a paperback.

• Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). Smart choices: A

practical guide to making better decision. o Amazon price: $21.68 as a paperback.

• [Gigerenzer, G., & Brighton, H. (2009).

Homo Heuristicus: Why biased minds make better inferences. Topics in

Cognitive Science, 1, 107-143.

pdf ]

There are ebook versions of these books (Kindle, possible epub).

PDF’s On Psych 466 Website

PDF’s for Week 1 Required Reading

• Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). Smart choices: A practical guide to making better decisions. Table of Contents, Preface & Chapter 1

• Hastie, R., & Dawes, R. M. (2009). Rational choice in an uncertain world (2nd ed.). Table of Contents; Chapter 1; Chapter 2;

• Gigerenzer, G., & Brighton, H. (2009). Homo Heuristicus: Why biased minds make better inferences. Topics in Cognitive Science, 1, 107-143.

• **NO PDF FOR KAHNEMAN**

PDF’s can be downloaded from the Psych 466 website.

Psych 466, Miyamoto, Aut '15 5Reading Assignment for Week 1

Reading Assignment for Week 1

• Chapters 1 & 2 of Hastie & Dawes (HD).

• Preface and Chapter 1 of Smart Choices.

• Gigerenzer, G., & Brighton, H. (2009). Homo Heuristicus: Why biased minds make better inferences. Pages 107 – 110.

• Kahneman (2011). Thinking, Fast and Slow. Pages 19 – 49.

♦ Ch 1: The characters of the story;

♦ Ch 2: Attention and effort;

♦ Ch 3: The lazy controller

Psych 466, Miyamoto, Aut '15 6

A standard view of JDM

Applied Decision Making

Two Conflicting Viewof Heuristic Reasoning

Psych 466 Website

Psych 466 Website

• URL: https://faculty.washington.edu/jmiyamot/p466/p466-set.htm

• Pdf’s of papers are posted here.

• Powerpoint lecture slides are posted here.

• Preview of the next lecture is posted here.

• Other stuff is posted here.

• All of this week’s readings are posted on the course website as pdf’s.

Psych 466, Miyamoto, Aut '15 7Assignments, Exams, Formula for the Course Grade


Assignments and Exams

• One midterm exam and a final exam.

All exams are take-home exams.

Exam answers are submitted over the internet.

• Three short assignments.

% Grade

Assignments 1, 2 & 3 9 (each)

Midterm 36

Final Exam 37

Course Website & Collect-It Website


Course Website & Collect-It Website

• Course website

http://faculty.washington.edu/jmiyamot/p466/p466-set.htm

• Assignments and lecture notes will be posted.

• Catalyst Collect It website for turning in assignments & exams

https://catalyst.uw.edu/collectit/dropbox/jmiyamot/36460

Get To Know Each Other


Get to Know Each Other

What is a Decision?


What is a decision?

• Discuss

• Give some examples. Get some examples from the class.

What is a Decision? – Some Examples


What is a decision?

• Major reflective decisions:o Whether or not to invest in a stock or business?o Whether or not to buy a house? Which house to buy?

Similar buying decisions for other major items, e.g., cars, computers, etc.o Whether to start a relationship with someone?

Whether to end a relationship with someone?o Medical decisions – whether or not to have surgery for a problem?

• Low level decisionso Shopping in a supermarketo Which way to go when driving a car to a particular locationo What to wear today

• Neural decision making (by neural mechanisms in the brain)

What Factors Do or Should Affect a Decision?


• What factors that DO affect a decision?

• What factors that SHOULD affect a decision?

• Are there factors that affect decisions even though

they should not?

• Discuss

General Description of Factor That Should Affect a Decision


What factors that DO or SHOULD affect a decision?

Three concrete decision examples:o Whether or not to take a particular course.o Whether or not to buy a new, better computer.o Whether or not to end a relationship with someone. Suppose the relationship has

a number of good features but also some bad features.

• What you want. Also, what you want to avoid.

How you feel about different ways the decision could turn out.

• How strong are your preferences (and dislikes) for particular outcomes?

• What factors or events will affect whether the outcome

will be good, mediocre or bad, and to what degree?

• How likely are the different possibilities?

Normative Decision Analysis – What Is It?


Normative Decision Analysis

• Enumerate outcomes

• Enumerate options

• Construct a decision analysis for the decision

• Evaluate the probabilities of different possible outcomes

• Determine which option has the greatest "expected utility."

What Are Typical Characteristics of Human Decision Making?

16

What Are Typical Characteristics of Human Decision Making

• Usually not analytic.

• Difficulty integrating feelings and thoughts (affect and cognition).

• Fast. Reasonably accurate.

• Difficulties with complex information.

• Cognitive factors, e.g., limited memory, limitations on speed of mental processing, limitations on available effort, ....

This course will help you be a better decision maker, especially for careful, reflective decisions.

Psych 466, Miyamoto, Aut '15 History of the Psychology of Decision Making


History of the Psychology of Decision Making

• Victorian rationality, Freudian irrationality,

behaviorist arationality.

• Expected utility theory (Von Neumann & Morgenstern, 1944)

Rational agent model of economic behavior

• Heuristics and biases movement, 1970 – 1990 (approx.)

• Reactions to heuristics and biases movementEvolutionary psychology, ecological psychology, naturalistic decision making,

Bayesian models of psychological processes

• Psychology of happiness

• Separate development – neuroscience of decision making (current hot

topic!)

The Cognitive Approach to Judgment & Decision Making

• See <lec02-1.p466.a15.pptm>: The lecture for the following Monday.It has improved versions of the some of the following slides.


Thursday, October 01, 2015: The Lecture Ended Here


The Cognitive Approach to Judgment & Decision Making

• Cognitive limitations – limitations on human cognitive capacity affect

judgment and decision making

• Heuristics and biases movement: 1970 – 1990 (approx.)

• Reactions to heuristics and biases movemento Evolutionary psychologyo Ecological psychologyo Naturalistic decision makingo Bayesian models of psychological processeso Emotion in decision processes

The Standard Memory Model

The Standard Cognitive Model of Human Memory

Psych 466, Miyamoto, Aut '15 20Sensory Registers

H&DFig. 1.1 Sensory Input Buffers

Working Memory

Central Executive

Phonological Buffer

GoalStack

Visuospatial Buffer

Long-Term Memory


• Sensory registers retain the sensory information for very brief periods of time.

Working Memory


Working Memory

Central Executive

Phonological Buffer

GoalStack

Visuospatial Buffer

Long-Term Memory


• Working memory (WM) holds a limited amount of information

for 10 – 20 seconds. Thoughts are actively manipulated in WM.

Long-Term Memory

Sensory Input Buffers

Working Memory

Central Executive

Phonological Buffer

GoalStack

Visuospatial Buffer

Long-Term Memory

H&DFig. 1.1


• Long-term memory (LTM) retains information over longer periods of time.

LTM interacts with WM.

General Hypothesis of Cognitive Research

Sensory Input Buffers

Working Memory

Central Executive

Phonological Buffer

GoalStack

Visuospatial Buffer

Long-Term Memory

H&DFig. 1.1


General Hypothesis of Cognitive Researcho Limitations in working memory impose limitations on human ability to

engage in complex reasoning.

o Decision making requires complex reasoning.

Basic Message: Cognitive Limitations Produce Simplifications


Working Memory

Central Executive

Phonological Buffer

GoalStack

Visuospatial Buffer

Long-Term Memory


Basic Message from Many Cognitive Studies

• LIMITED WM CAPACITY:

When information is complex, people are forced to simplify the information.

Simplifications can lead to distortions.

• Exception: Experience can teach one to integrate specific types of complex

information but only in some cases. o Example: Expert chess players can reason about complicated chess problems.o Example: Experienced drivers can understand traffic situations that are actually

very complex.

• Next a complex representation of decisions under risk

(decision trees).

Where We Are in the Lecture


Where We Are in the Lecture

• Normative and prescriptive decision models

require complex representations and processing

• Cognitive limitations cause us to simplify decisions,

and this can produce errors

NEXT: How to Deal with Cognitive Complexity

• Intuitive clinical judgment versus statistical Models

• Brunswik’s Lens Model of Human Judgment

• Linear models applied to making better choices

• Applications to clinical judgment

Clinical vs Actuarial Jdmt

Next Lecture


Intuitive Judgment versus Acturial Judgment

• Intuitive judgmento Combine complex information in your heado Make decision based on gut feeling

• Actuarial judgment (a.k.a. statistical model or linear model)o Base decisions on a statistical decision rule.

Statistical Models Outperform Human Judges

Examples of Judgment Problems

• We will only consider decisions to which intuitive judgment and actuarial judgment (statistical methods) both apply.--------------------------------------------------------------------------

E.g., Clinicians attempt to identify patients with progressive brain dysfunction.

♦ Data = intellectual test results♦ Experienced clinicians achieved 58% correct detection of new cases.♦ Statistical model achieved 83% correct detection of new cases.

• E.g., Bank loan officer must decide which loan applications are “good risks” and which are “bad risks.”

• E.g., Professors must decide which applicants will do well in grad school and which will not do well.

Psych 466, Miyamoto, Aut '15 28Critique of Clinical Judgment – What Is It?

Critique of Clinical Judgment

• Clinical insight – does it exist?

• Clinical judgment – what is it good for?

• Clinical judgment – what are its weaknesses?

• Accusation: Belief in the efficacy of intuitive clinical judgment is a cognitive conceit.

Psych 466, Miyamoto, Aut '15 29General Finding: Stat Models Outperform Human Judges


General Finding: Stat Models Outperform Human Judges

• Statistical models almost always outperform the human judges

on clearly defined decision tasks.

• Human cognitive processes are good at noticing particular pieces of

information. o Does my friend look happy? Sad? Stressed? Irritated?o Is the patient nervous? Defensive? Exhibitionistic?

• Human cognitive processes are not good at integrating

multiple pieces of information.o Can I predict how my friend will feel about a surprise party?o Can the clinician predict how the patient will progress after 4 months

of therapy?

Implications of this Lecture / END


Implications of this Lecture

• We can improve human decisions by stressing what humans are good at:

... noticing what are important issues that are relevant to a decision;

... evaluating how good or bad is an outcome on a specific dimension;

while avoiding what we are not good at:

... combining complex information in our heads.

• Know thyself → Make better decisions

• NEXT WEEK: Linear models of human judgment ......

and what they tell us about us!

END

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Psychology 466: Judgment & Decision Making Psychology 466: Judgment & Decision Making Instructor: John Miyamoto 10/01/2015: Lecture 01-1 Note: This Powerpoint