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decision making - Coggle Diagram
decision making
reducing uncertainty
minimise uncertainty
avoid risk
maximise benefit
loss aversion
uncertainty --> anxiety
stages of decision making
identification stage (framing)
generation stage
judgment stage
evidence --> judgement --> decision
How do we weigh up evidence ?
How do we make decisions?
the rational approach
conjunctive events
independent - probability of drawing a card from one pack, and then a second card from another pack
AND rule
**
Conjunctive events
decrease probability
(X and Y and Z)**
individual probabilities are multiplied
cumulative events
dependent events - draw a card from a deck. Do not replace it and draw another card
Cumulative probabilities
increase probability ( X or Y or Z)
individual probabilities are added
heuristics
mental shotcuts that facilitate problem-solving. they are generalisations that
reduced cognitive load
and can be effective for
immediate judgements
can often be irrational
availability heuristic
probability judgements based on
ease with which instances or occurances can be brought to mind
seems sensible in absence of perfect knowledge, but can lead to biases
example: Tversky and Kahneman 1973
more words beginning with the letter K or if more words have K as third letter. 3rd = 2x as many words - 70% of P said 1st - ease of which it comes to mind
representative heursitic
probability judgements about the liklihood that an object or event arises some category based on the extent to which
the object or event in question is similar to prototypical examples of the category
the linda problem F> T&F > T
Anchoring and adjustment
when estimating a value, we tend to give and initial value, then adjust it by increasing or decreasing our estimation
can get stuck on that intial value - which is referred to as anchoring- which results in us making insufficient adjustments
Marchiori et al 2014: its easier to end up overating when we are served a large portion vs a smaller one
summary
embodied and situated to reduce cognitive load
a heaursitic is not inhernetly good or bad, rational or irrational; its accuracy depends on the structure of the environemtn