Decision Making and Reasoning

Decision Making and Reasoning

• Reasoning is a thought process that leads to a conclusion
• Reasoning guides decision making
• People make about 35,000 decisions per day
• This equates to roughly 2,000 decisions every hour
• Decision fatigue can occur, so process understanding is key
• Neuroeconomics studies how people make value-based decisions
• Study of decision-making involves formalizing psychology theories, evaluations, and linking them to the brain
• Decision processes are dynamic and change across contexts
• Positive mood can cause people to gamble more on sunny days than cloudy days
• Hunger makes people choose smaller, immediate rewards over larger, delayed rewards

Inductive vs Deductive Reasoning

• Inductive and deductive reasoning are distinct forms of reasoning
• Tasks used to study deductive reasoning include syllogisms and conditional reasoning
• Heuristics and biases affect engagement in decision-making

Inductive Reasoning

• A concrete form of reasoning
• It involves making general conclusions from specific observations
• Example: A detective uses clues at a crime scene (broken glass, strewn books, spilled milk) to make a conclusion about what happened
• The conclusions reached through inductive reasoning can be false
• It is "probably but not definitely true"
• General conclusions are drawn from specific observations
• Example: Claire buys ice cream from the same Dairy Queen five times and enjoys it each time. Claire concludes she will have quality ice cream that she will enjoy next time she visits.
• Can lead to heuristics and stereotyping if the person is unaware
• It forms the basis of some human learning from experience
• Learned rules are applied to new situations
• Language learning is an example, such as understanding the meaning of "balloon" when hearing "the purple balloon dog" and already knowing "purple" and "dog"

Deductive Reasoning

• An abstract form of reasoning
• Using general theories to reason about specific observations
• Example: The general belief is "The Cog Dog loves Cognition", and "The Cog Dog is a dog". It is then assumed that all dogs love Cognition
• Induction develops from age 7 to 11
• Deduction develops during teenage years
• Deductive reasoning utilizes experiments to arrive at predictions and theories
• Inductive reasoning involves specific observations, which lead to generalizations and theories
• Different parts of the brain are used for deductive versus inductive reasoning, especially in the frontal cortex
• System 1 is automatic and requires little effort; it is linked to inductive reasoning
• System 2 is slower and requires more effort; it is linked to deductive reasoning

Syllogisms and Validity

• Syllogisms are formal systems for generating statements
• Statements are true if the formal rules are followed
• Premises are presumed to be true
• To determine if the premise statements support the conclusion based on the logical structure, note the content
• Includes a major premise (general), a minor premise (specific), and a conclusion (test)
• Example: All dogs are animals, all animals have 4 legs, therefore all dogs have 4 legs.
• Validity is whether the conclusion is true based on the premises' logical form
• Valid syllogisms follow logical rules
• Truth relates to world knowledge or content; it is distinct from validity
• A valid structure follows the form: All A are B; All B are C; Therefore, all A are C
• Example: All birds are animals, All animals eat food, Therefore, all birds eat food
• Another example: All birds are animals, All animals have four legs, Therefore, all birds have four legs

Types of Syllogisms

• All statements: "All A are B"
• Negative statements: "No A is a B, also means no B is A"
• Some statements: "Some A are B," meaning at least one, possibly all

Atmosphere Effect

• People rate a conclusion as valid when the qualifying word (e.g., 'all,' 'some') in the premise matches those in the conclusion

Mental Model Theory

• People construct mental simulations of the world based on statements (e.g., syllogisms) to judge logic and validity
• Reasoning is a simulation of the world fleshed out with relevant knowledge
• Negative statements can be difficult to imagine

Omission Bias

• People have more trouble reasoning with negative information
• Withholding doing something is subconsciously not as bad as doing it
• Inaction is harder to classify as wrong than action
• People react more strongly to harmful actions than to harmful inactions

The Trolley Problem

• A trolley is coming down a track with 5 people
• If no one intervenes, the trolley will hit and kill five people
• A lever is available to switch to another track that one man is standing on
• Choosing to "do nothing and kill the five people" or choosing to "switch the train to another track and kill one man"
• Another scenario involves stopping the trolley and saving the five people by pushing a large man to his death in front of the trolley
• Pushing the man leads to adverse responses
• Ventromedial prefrontal lesions, high-functioning autism and positive emotion induction result in more utilitarian response

Belief Bias

• People struggle with syllogisms when logical validity conflicts with truth

Conditional Reasoning

• Statements are "If P then Q", where P is the antecedent and Q is the consequence
• To test the validity of the conditional statement "If it is raining, I will get wet"
• Includes "What happens if Q is true, if I am wet, is it raining", "What happens if P is false? If it isn't raining, am I wet?" and "What happens if Q is false? If I am not wet, is it raining?"
• The Wason task demonstrates conditional reasoning
• If a card shows a vowel on one side, it has an even number on the other
• Conditional statement relates to "If 'vowel' then 'even'"
• People often incorrectly test this statement
• Very few people turn over card 'E' and '5' to test the rule
• Confirmation bias is the tendency to seek confirmatory evidence for a hypothesis
• Using the falsification principle, the P card (is there a not-Q on the back?) and the not-Q card (is there a P on the back?) allows to eliminate false statements

Familiarity Effects

• The statement "If a person is drinking a beer (P), then the person is over 21 years old (Q)"
• Cards have age, beverage (on the other side) for each card
• Need to determine which card(s) to flip to verify the statement
• The return trip effect observes that the time returning on a known route is judged shorter than the initial route

Heuristics and Biases

• Heuristics are generalizations applied when reasoning
• Biases are systematically inaccurate choices, which reflect overuse of heuristics
• Some heuristics bias the way information is interpreted and judged
• Other heuristics bias how we make predictions

Interpretation: Representativeness Bias

• The probability that an item (person, object, event) is categorized based on resemblance
• Overuse of schemas and pre-existing knowledge can lead to stereotyping, base-rate neglect and conjunction fallacy

Base-Rate Neglect

• You randomly select one Canadian male, Adam, who wears glasses, speaks quietly, and reads a lot
• Is Adam more likely a farmer or a librarian?
• The representative bias leads to ignore base rates, as it is more likely Adam is a farmer as there are more farmers than librarians

Conjunction Fallacy

• Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy, was deeply concerned with issues of discrimination and social justice, and participated in anti-nuclear demonstrations.
• Which is more likely, Linda is a bank teller, or Linda is a bank teller actively involved in the feminist movement
• Fallacy involves the false assumption that a greater number of specific facts are more likely than a single fact
• Conspiracy beliefs can lead to this: Participants with conspiracy beliefs more likely make conjunction fallacies in COVID conspiracy scenarios than other topic

Availability Bias

• The easier it is to remember something, the more likely someone think it is to happen in the future
• More words in the English language that begin with the letter R or in the third letter?
• The relative ease that individuals can recall words such as run, rather, rock are easier to recall vs arrange, park, word.
• Confusing availability of memories for frequency
• Sensational news is readily available, like excessive coverage of plane crashes
• It leads to a person thinks the world is violent, even the average American has viewed 8000 murders on TV by age 12
• Many more people have a fear of flying and consider crashes common because it is available

Judging our Life

• Memories (challenges) are recalled easier than other people's experiences
• Academics think they have a harder time with grant panels vs other members
• Siblings think parents were harder on them even vs their sister and/or brother

Anchoring and Adjustment Heuristic

• Participants given a random number between 0 and 100, and have to determine if it is higher or lower than the percentage of African nations in the United Nations
• Following that number, they have to estimate actual percentage
• Participants given a HIGH random number are more likely to give greater percent estimates than those given a LOW number
• Even unrelated anchor numbers can impact estimates

Prediction and Gambling

• The gambler's fallacy is a false belief that predicted outcomes of an independent event depend on past outcomes
• Outcomes are assumed linked, even though they are random events
• Believing one is eventually going to win after having many losses
• Commonly, people continue to invest after several losses
• Judges are more likely to deny asylum after granting (denying) asylum to previous candidates, and loan officers more likely to deny a loan after approving the last application

Illusory Correlations

• Linking two co-occurring events and assuming a relationship
• Wearing a lucky jersey to sports games because the team won last time

The Hot-Hand Belief

• Thinking someone who experiences success will keep having success
• Winning has a "streak" of wins
• Most fans think a basketball player will make another shot after having made the past 2 shots, even after missing a shot
• Doesn't guarantee shot success
• Just because something feels true, does not mean it is true

Downsides to Heuristics and Pre-Mortem

• Heuristic processing is central for making intuitive and rapid judgments
• Useful for predictive understanding
• Over-application of cognition can lead to Stereotyping and Gambling addictions
• Post-mortem analysis can prevent over-reliance, where failure is used as a guide
• Pre-mortem technique involves anticipating and preventing mistakes before results
• It involves considering on the verge of making a decision, what challenges occur, and creating a plan