Decision Making and Reasoning  In a process of elimination by aspects, we eliminate

alternatives by focusing on aspects of each

 fallacy—erroneous reasoning—in judgment and alternative, one at a time, instead of mentally
reasoning. manipulating all the weighted attributes of all the
 Judgment and decision making are used to select from available options.
among choices or to evaluate opportunities.
 Using Probabilities to Make Decisions
Judgment and Decision Making  We often use mental shortcuts and even biases that
Classical Decision Theory limit and sometimes distort our ability to make rational
 The earliest models of how people make decisions are decisions.
referred to as classical decision theory.  One of the key ways in which we use mental shortcuts
 Most of these models were devised by economists, centers on our estimations of probability.
statisticians, and philosophers, not by psychologists.  Another kind of probability is conditional probability,
 Classical decision theory suggested that people optimize which is the likelihood of one event, given another.
their decisions, but researchers began to realize that we  The formula for calculating conditional probabilities in
have only limited resources light of evidence is known as Bayes’s theorem.

 The Model of Economic Man and Woman  Representativeness Heuristic

Among the early models of decision making crafted in the  In representativeness, we judge the probability of an
20th century was that of economic man and woman. This uncertain event according to the following:
model assumed three things: 1. how obviously it is similar to or representative of the
1. Decision makers are fully informed regarding all possible population from which it is derived; and
options for their decisions and of all possible outcomes of their 2. the degree to which it reflects the salient features of the
decision options. process by which it is generated
2. They are infinitely sensitive to the subtle distinctions among  We also tend to use the representativeness heuristic
decision options. more frequently when we are highly aware of
3. They are fully rational in regard to their choice of options anecdotal evidence based on a very small sample of
 Although this model may seem dated, it prevails in many the population.
theories of economics.  One reason that people misguidedly use the
 And people often assume that their thinking is the rational representativeness heuristic is because they fail to
kind proposed by this model, even when it isn’t. understand the concept of base rates.
 Base rate refers to the prevalence of an event or
 Subjective Expected Utility Theory characteristic within its population of events or
 An alternative model makes greater allowance for the characteristics.
psychological makeup of each individual decision maker.
 According to subjective expected utility theory, the goal of  Availability Heuristic
human action is to seek pleasure and avoid pain.  make judgments on the basis of how easily we can
 According to this theory, when people make decisions, they call to mind what we perceive as relevant instances of
will seek to maximize pleasure (referred to as positive a phenomenon
utility) and to minimize pain (referred to as negative utility).
we calculate two things.  Anchoring
1. subjective utility, which is a calculation based on the  A heuristic related to availability is the anchoring and
individual’s judged weightings of utility (value), rather than on adjustment heuristic, by which people adjust their
objective criteria. evaluations of things by means of certain reference
2. The second is subjective probability, which is a calculation points called end anchors.
based on the individual’s estimates of likelihood, rather than on
objective statistical computations.  Framing
 Another consideration in decision theory is the
Heuristics and Biases influence of framing effects, in which the way that the
Heuristics are mental shortcuts that lighten the cognitive load options are presented influences the selection of an
of making decisions. option
 Satisficing  For instance, we tend to choose options that
 As early as the 1950s some researchers began to demonstrate risk aversion when we are faced with an
challenge the notion of unlimited rationality. option involving potential gains.
 These researchers recognized that humans do not  Framing effects have public relevance.
always make ideal decisions and that we usually
include subjective considerations in our decisions. Biases
 We show bounded rationality—we are rational, but  Illusory Correlation
within limit  We are predisposed to see particular events or
 One of the first heuristics that was formulated by attributes and categories as going together, even
researchers is termed satisficing when they do not.
 In satisficing, we consider options one by one, and  In the case of events, we may see spurious cause–
then we select an option as soon as we find one that effect relationships.
is satisfactory or just good enough to meet our  In the case of attributes, we may use personal
minimum level of acceptability. prejudices to form and use stereotypes
 Satisficing is used in industrial contexts in which too  Illusory correlation even may influence psychiatric
much information can impair the quality of decisions diagnoses based on projective tests such as the
Rorschach and the Draw-a-Person tests
 Elimination by Aspects
 When we have more alternatives than we can  Overconfidence
consider in the time available, we sometimes use a
different strategy
  Another common error is overconfidence—an  Groups form decisions differently than individuals.
individual’s overvaluation of her or his own skills, Often, there are benefits to making decisions in
knowledge, or judgment. groups.
 They also generate evidence and test their ideas in a  A phenomenon called groupthink, however, can
way to conform to their beliefs. This is called myside occur that seriously impairs the quality of decisions
bias. made.
 Hindsight Bias
 Hindsight bias occurs when we look at a situation
retrospectively, and we believe we easily could have seen Benefits of Group Decisions
in advance all the signs and events that led up to a  Working as a group can enhance the effectiveness of
particular outcome decision making,
 In the hindsight bias, people misremember their original  There is also an increase in resources and ideas
judgment of a situation in the face of the outcome of that  Another benefit of group decision making is improved
situation. group memory over individual memory
 Hindsight bias hinders learning because it impairs one’s
ability to compare one’s expectations with the outcome Groupthink
 Groupthink is a phenomenon characterized by premature
decision making that is generally the result of group
Fallacies members attempting to avoid conflict
The application of a heuristic to make a decision may lead to  Groupthink frequently results in suboptimal decision
fallacies in thinking. making that avoids nontraditional ideas
 Gambler’s Fallacy and the Hot Hand Janis (1971) delineated six symptoms of groupthink:
 Gambler’s fallacy is a mistaken belief that the 1. Closed mindedness—the group is not open to alternative
probability of a given random event, such as winning ideas.
or losing at a game of chance, is influenced by 2. Rationalization—the group goes to great lengths to justify
previous random events. both the process and the product of its decision making,
 He feels that he is “due” to win. distorting reality where necessary in order to be persuasive.
 Gambler’s fallacy is an example of the representative 3. Squelching of dissent—those who disagree with the group
heuristic gone awry are ignored, criticized, or even ostracized.
 A tendency opposite to that of gambler’s fallacy is 4. Formation of a “mindguard” for the group—one person
called the hot hand effect. appoints himself or herself the keeper of the group norm and
 It refers to a belief that a certain course of events will ensures that people stay in line.
continue. 5. Feeling invulnerable—the group believes that it must be
right, given the intelligence of its members and the information
 Conjunction Fallacy available to them.
 The availability heuristic might lead to the conjunction 6. Feeling unanimous—members believe that everyone
fallacy. unanimously shares the opinions expressed by the group.
 In the conjunction fallacy, an individual gives a
higher estimate for a subset of events (e.g., the Neuroscience of Decision Making
instances of ing) than for the larger set of events  the prefrontal cortex, and particularly the anterior cingulate
containing the given subset cortex, is active during the decision-making process

 Sunk Cost Fallacy

 An error in judgment that is quite common in people’s Deductive Reasoning
thinking is the sunk cost fallacy  A related kind of thinking is reasoning.
 This fallacy represents the decision to continue to  Reasoning is the process of drawing conclusions from
invest in something simply because one has invested principles and from evidence
in it before and one hopes to recover one’s Reasoning is often divided into two types:
investment. 1. Deductive Reasoning
 Deductive reasoning is the process of reasoning from
Do Heuristics Help Us or Lead Us Astray? one or more general statements regarding what is
 a simple heuristic, take-the-best, can be amazingly known to reach a logically certain conclusion
effective in decision situations  It often involves reasoning from one or more general
 The take-the-best heuristic belongs to a class of heuristics statements regarding what is known to a specific
called fast-and-frugal heuristics (FFH). application of the general statement.
 this class of heuristics is based on a small fraction of  Deductive reasoning is based on logical propositions.
information, and decisions using the heuristics are made  A proposition is basically an assertion, which may be
rapidly. either true or false.
 Fast-and-frugal heuristics can form a comprehensive  In a logical argument, premises are propositions about
description of how people behave in a variety of contexts. which arguments are made.
type of deductive reasoning:
 Opportunity Costs  Conditional Reasoning
 Opportunity costs are the prices paid for availing  reasoner must draw a conclusion based on an if-then
oneself of certain opportunities. proposition.
 Taking opportunity costs into account is important  we put aside the issue of truth and focus only on the
when judgments are made. deductive validity, or logical soundness, of the reasoning.
 Naturalistic Decision Making  the modus ponens argument, the reasoner affirms the
 based on decision making in natural environments antecedent
(naturalistic decision making).  modus ponens argument, draw another well-reasoned
 Naturalistic decision making can be applied to a broad conclusion from a conditional proposition
range of behaviors and environments.
 Group Decision Making
 This particular set of propositions and its conclusion is  Inductive reasoning is the process of reasoning from
termed a modus tollens argument, in which the reasoner specific facts or observations to reach a likely conclusion
denies the consequent. that may explain the facts.
 Inductive reasoning forms the basis of the empirical
 The Wason Selection Task method
 Conditional Reasoning in Everyday Life
 Most people of all ages appear to have little difficulty  Causal Inferences
in recognizing and applying the modus ponens  One approach to studying inductive reasoning is to
argument. examine causal inferences—how people make
 However, few people spontaneously recognize the judgments about whether something causes
need for reasoning by means of the modus tollens something else
argument.  The philosopher David Hume observed that we are
 Influences on Conditional Reasoning most likely to infer causality when we observe
 Pragmatic reasoning schemas are general organizing covariation over time:
principles or rules related to particular kinds of goals, such  Once we have identified one of the suspected causes
as permissions, obligations, or causations. of a phenomenon, we may commit what is known as a
 These schemas sometimes are referred to as pragmatic discounting error.
rules.  The teachers’ original beliefs are thereby “confirmed”
 These pragmatic rules are not as abstract as formal logical  This effect is referred to as a self-fulfilling prophecy
rules.
 Categorical Inferences
 Syllogistic Reasoning: Categorical Syllogisms  People generally use both bottom-up and top-down
 Syllogisms are deductive arguments that involve drawing strategies
conclusions from two premises  Reasoning by Analogy
What Are Categorical Syllogisms?  An application of analogies in reasoning can be seen
 Probably the most well-known kind of syllogism is the in politics.
categorical syllogism.  Analogies can help governing bodies come to
 In the case of the categorical syllogism, the premises state conclusions
something about the category memberships of the terms.
An example of a categorical syllogism follows: An Alternative View of Reasoning
Premise 1: All cognitive psychologists are pianists.  An alternative perspective on reasoning, dual-process
Premise 2: All pianists are athletes. theory, contends that two complementary systems of
Conclusion: Therefore, all cognitive psychologists are athletes. reasoning can be distinguished.
subject is cognitive psychologists, the middle term is pianists,  The first is an associative system, which involves mental
and the predicate is athletes. operations based on observed similarities and temporal
contiguities
four kinds of premises:  The associative system can lead to speedy responses that
1. Universal affirmative statements: Statements of the form are highly sensitive to patterns and to general tendencies.
“All A are B” because they make a positive (affirmative)  Another example is the belief bias effect in syllogistic
statement about all members of a class (universal). reasoning.
2. Universal negative statements: negative statements about  This effect occurs when we agree more with syllogisms
all members of a class (e.g., “No cognitive psychologists are that affirm our beliefs, valid.
flutists.”).  An example of the workings of the associative system may
3. Particular affirmative statements: positive statements be in the false consensus effect.
about some members of a class (e.g., “Some cognitive  In this system, people believe that their own behavior and
psychologists are left handed.”). judgments are more common and more appropriate than
4. Particular negative statements: negative statements about those of other people
some members of a class (e.g., “Some cognitive psychologists
are not physicists.”) Neuroscience of Reasoning

Heuristics in Deductive Reasoning

 Heuristics in syllogistic reasoning include overextension
errors.
 In these errors, we overextend the use of strategies that
work in some syllogisms to syllogisms in which the
strategies fail us.
 foreclosure effects when we fail to consider all the
possibilities before reaching a conclusion.
 premise-phrasing effects may influence our deductive
reasoning, Premise-phrasing effects may lead us to leap to
a conclusion without adequately reflecting on the deductive
validity of the syllogism.

Biases in Deductive Reasoning

 In confirmation bias, we seek confirmation rather than
disconfirmation, or rejection, of what we already believe.
 Confirmation bias can be detrimental and even dangerous
in some circumstances.

2. Inductive Reasoning