Chapter 5 Problem Solving PDF

Chapter 5: Problem Solving Bounded Rationality: Refers to the limits on our ability to think and reason clearly, due to things like limited information or time. Satisficing: Involves selecting a solution that is good enough, rather than the best possible one, often due to time constraints or limit...

Chapter 5: Problem Solving Bounded Rationality: Refers to the limits on our ability to think and reason clearly, due to things like limited information or time. Satisficing: Involves selecting a solution that is good enough, rather than the best possible one, often due to time constraints or limited options. A Problem Solving Framework: PADIL STEP 1: DEFINE AND STRUCTURE THE PROBLEM A Problem Solving Framework: Step 1: Define and Structure the Problem Be sure you are working on the right problem. Avoid starting with the solution, rather than the problem Framing: The way in which a problem is constructed can have an impact on the solutions generated. “This burger is 90% lean versus 10% fat”. Consider reframing problems so that you view them differently, which could generate a wider set of solutions. Thinking Systematically A System is a perceived whole whose elements “hang together” because they continually affect each other over time and operate toward a common purpose. Effective problem solving demands attention to a larger system and to uncovering the root causes. Systematic Structure This refers to the pattern of connections and interactions between different parts of a system. While symptoms of problems are often easy to see, the true causes lie in the deeper structure of the system. Understanding this hidden structure is key to finding lasting solutions. STEP 2: GENERATE MANY ALTERNATIVES Generate many more possible alternatives than you expect. Techniques for generating alternatives: Brainstorming: A group activity where members freely share ideas without judgment. Brainwriting: Similar to brainstorming, but individuals write down their ideas independently before sharing with the group. STEP 3: DECIDE ON A SOLUTION STEP 4: MAKE THE DECISION STEP 5: IMPLEMENT THE SOLUTION Why Smart People Make Bad Decisions Intuition This is the subconscious knowledge we have gathered from our experiences, often without realizing it. However, intuition can be affected by unconscious biases, leading to poor decision-making even among intelligent individuals. Perception and Attribution Errors Fundamental Attribution Error: We tend to blame people's behavior on their internal traits (like personality) rather than considering external factors that may have influenced them. Self-Serving Bias: We usually credit our successes to our own abilities but blame failures on outside circumstances. Errors of Judgment Availability Bias: We tend to judge how common or significant something is based on how easily we can recall examples or information about it. Example: People often believe there are more homicides than suicides because homicides are reported more frequently in the news, even though there are actually more suicides. Representativeness Bias: We tend to focus on specific details or characteristics that seem typical or representative of a group, while ignoring relevant statistical information (base rates). This can lead to incorrect assumptions or judgments. Example: If someone meets a friendly person who is a librarian, they might assume that most librarians are outgoing and sociable, even though the base rate of outgoing people in that profession might be low. Anchoring and Adjusting: This bias occurs when people rely too heavily on the first piece of information they encounter (the "anchor") when making decisions. They then make adjustments based on that anchor, but these adjustments are often insufficient. Example: If a car is initially priced at $30,000 and later marked down to $25,000, buyers may perceive it as a great deal because they are anchored to the higher price, even if the fair market value is actually much lower. Confirmation Bias: This is the tendency to seek out and give more weight to information that supports our existing beliefs or intuitions, while ignoring or dismissing evidence that contradicts them. Example: If someone believes that a specific diet is effective, they might only pay attention to success stories and research that back up that diet, while ignoring studies that show it may not work for everyone or could be harmful. Overconfidence Bias: This bias refers to the tendency to overestimate our own abilities, skills, or knowledge, believing that we have a unique trait that gives us an advantage over others. Example: A person might be overly confident in their ability to predict stock market trends, thinking they can consistently outperform the market, while failing to recognize the inherent unpredictability and risks involved in investing. Escalation of Commitment: This is the tendency to keep putting time, money, or effort into a decision or project that is clearly not working, hoping that things will improve, despite a lack of evidence for a positive outcome. Example: A company might continue to fund a failing product, believing that additional investment will eventually lead to success, even when sales data shows that the product is not gaining traction in the market. Overcoming Judgment Biases Confidence Estimates: Instead of providing a single point estimate, express your estimates as ranges or intervals. This helps account for uncertainty. Trial and Error Calibration: Keep a record of your estimates and evaluate the outcomes. Learn from both the evidence that supports your predictions and the evidence that contradicts them to improve future estimates. Healthy Skepticism: Critically assess both the strengths and weaknesses of your viewpoint. Consider how you will evaluate your decision and have a “Plan B” ready in case your initial approach doesn't work out.