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Judgement and decision making (Four specific forms of overconfidence (Over…
Judgement and decision making
Perception: receiving and interpreting information through our senses to give sense to the environment
Influenced by perceiver characteristics: Goals and needs, existing knowledge, emotions
Target's characteristics also shape our perception
Social identity theory: make references about a person's characteristics based on the social category they belong to
Halo effect: drawing a general impression about an individual based on a single characteristic
Four specific forms of overconfidence
Over-precision
• We are too sure that our judgments and decisions are accurate
• Both lay people and experts are subjected to this bias
Illusion of control
• Sometimes we think we have more control over circumstances than we actually do
• E.g., superstition, “lucky shirt/tie/ring”, etc.
Planning fallacy
• We tend to over-estimate the speed at which we will complete projects and tasks
• Applies to both complex as well as simple tasks
Over-placement
• We tend to believe that we are better than others in specific ways when we are not
• Raise your hand if you believe you are a better driver than 50% of the drivers in this unit
Attribution: determining whether an event or behaviour is based on internal or external factors
Fundamental attribution error: attributing more to internal factors than external factors
Hindsight Bias- we tend to overestimate what we knew beforehand based upon what we later learned
Availability Heuristic - we assess the frequency, probability, or likely causes of an event by the degree to which instances or occurences of that event are readily available in the memory
Conscious mind capacity is limited: maximum 7 items
10 - 60 bits of information per second
Unconscious mind capacity is unlimited - suitable for complicated tasks
Escalation of commitment - investing more resources into an already failing course of action
Curse of knowledge: we tend to ignore the fact that other's may not have the same information as we do when assessing their behaviour or decision
Framing heuristic
Gain vs No gain: take lesser risk
Loss vs no loss: take more risk because they want to avoid loss
Representative heuristic: looking for characteristics that that individual or event may have in common with previously formed thoughts when making a judgement (stereotype)
Self-serving bias: we make judgements that benefit ourselves