Lecture 1

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Problem Solving And Decision

Making
Chapter 8
Definition
 Problem solving refers to active efforts to
discover what must be done to achieve a goal
that is not readily attainable.
Types of Problems (Greeno)
 Problems of Inducing Structure

 Problems of Arrangement

 Problems of Transformation
Approaches to Problem Solving
 Trial & Error

 Heuristics

 Forming Subgoals (Tower of Hanoi)

 Working Backwards (Water Lilies)

 Using Analogies (Tumor)

 Reenvisioning the Problem


Barriers to Effective Problem Solving
 Irrelevant (Distracting) Information

 Functional Fixedness (Screw Driver)

 Mental Set

 Unnecessary Constraints
Decision Making
 Two types of decisions
 Making choices (selecting among alternatives)
 Taking chances (deciding amidst uncertainty)
Selecting Among Alternatives
 Strategies
 Additive
 Subtractive (Elimination of Aspects)
Making “Risky” Decisions
 Risky Decisions (Tversky & Kahneman)
 Factors Influencing Risky Decisions
 Using Probabilities
 Expected Value
 Subjective Utility
 Factors that Affect Probability Estimates
 Heuristics
 Availability
 Representativeness
 Ignoring Base Rates
 The Conjunction Fallacy
 Alternative Outcomes Effect
 Framing the Question
Humans as Decision Makers
Classic View Evolutionary View
Irrational Specialized cognition is adaptive
Prone to errors & mistakes Rational
Mentally limited Fast and Frugal heuristics work

Dual Process Theories


Intuitive Thinking
Rational Thinking
Reducing Regret after Decisions
$20
Cognitive Dissonance Theory Told next person
tasks were fun
and interesting

Boring Asked how


Tasks much they
enjoyed experiment

Told next person


tasks were fun
and interesting
$1
Making Decisions in Groups
 Group Polarization

 Groupthink
Group Polarization
Group Polarization- tendency to shift toward more
extreme positions after group discussion

Risky Neutral Cautious


Groupthink
 Groupthink- syndrome of bad decision-making

12.17

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