Snap Judgments - Risks and Benefits of Heuristic Thinking Chapter 10 Snap Judgments - Risks and Benefits of Heuristic Thinking © 2016 by Pearson Education, Inc.

Learning Outcomes Explain, using examples, the difference between system-1 and system-2 decision making Explain, using examples, each of the cognitive heuristics described in this chapter, including its potential benefits and risks The chapter begins by explaining, using examples, the difference between system-1 and system-2 decision making. It further uses examples for each of the cognitive heuristics described in the chapter, including its potential benefits and risks.

Chapter Opening Video Chapter Opening Video The video explains the types of heuristic thinking. It shows how important it is to think reflectively rather than just be reactive about the changes happening around us.

Our Two Human Decision-Making Systems The two-systems approach to human decision making The value of each system Our Two Human Decision-Making Systems - Human decision making emerges from the interaction between argument making and heuristic thinking. Argument making - The effort to be logical. Heuristic thinking - The tendency of relying on highly efficient and reliable cognitive shortcuts when reaching a decision. Cognitive heuristics enable individuals to make judgments and decisions efficiently. The two-systems approach to human decision making Reactive (System-1) thinking. Reflective (System-2) thinking. The value of each system System-1 and System-2 are vital decision-making tools, especially when stakes are high and uncertainty is an issue.

The Two-systems Approach to Human Decision Making System-1 thinking Relies on situational cues, salient memories, and heuristic thinking to arrive at quick and confident judgments System-2 thinking Useful for judgments in unfamiliar situations, processing abstract concepts, and deliberating The Two-systems Approach to Human Decision Making System-1 thinking Relies on situational cues, salient memories, and heuristic thinking to arrive at quick and confident judgments. Example - Decisions made by good drivers at moments of crisis. Decision making is instant, intuitive and reactive. System-2 thinking Useful for judgments in unfamiliar situations, for processing abstract concepts, and for deliberating. Integrates heuristic maneuvers as components of logical arguments. Argument making is a part of the inference and deliberation process. Explanations involve making arguments and giving required reasons. When a person shares his/her reflective interpretations, analyses, evaluations, and inferences, they offer explanations.

Model of Two-System Human Decision Making Makes quick decisions, highly reactive process. System-2 Engages in reflective decision making. All levels of education, aiming at improving one’s critical thinking focus on strengthening System-2 problem solving and decision making. Can override system -1 as it is more reflective, analytical, mindful, and meta-cognitive form of thinking.

The Value of Each System System-1 can help get through day-to-day activities while engaging System-2 on some other topic of concern People do not store memories of system-1 while deliberating about something using System-2 Systems are capable of overriding each other The Value of Each System System-1 can help get through day-to-day activities while engaging System-2 on some other topic of concern. Example - Finishing a bowl of cereal without noticing. People do not store memories of system-1 while deliberating about something using System-2. Mental focus is on the System-2, system-1 operates in the background. Systems are capable of overriding each other. Leads to conflicted decision-making. A good thinker can make both system errors from time to time. Misinterprets things. Overestimates or underestimates chances of succeeding. Relies on mistaken analogies. Rejects options. Trusts feelings and hunches. Judges things that are not credible.

Heuristics: Their Benefits and Risks Individual cognitive heuristics Heuristics in action Heuristics: Their Benefits and Risks Errors in heuristic thinking can result in serious problems. One gets through routine parts of a day making quick, automatic reactive heuristic judgments. They act as a quick-fix for the purpose at hand. They conserve one’s mental energy for bigger, more important, and less familiar problems. People have no time for reflective thought. Individual cognitive heuristics Shortcuts in decisions making that an individual can rely upon in real life. There are 17 common heuristics. Heuristics in action Cognitive heuristics expedite one’s thinking by generating ideas, but not necessarily reflectively.

Individual Cognitive Heuristics Cognitive heuristics: Decision-making shortcuts people rely on to expedite their judgments on what to believe or do Satisficing Temporizing Affect Simulation Individual Cognitive Heuristics Cognitive heuristics: Decision-making shortcuts people rely on to expedite their judgments on what to believe or do. Satisficing Choosing a satisfactory option that achieves a particular purpose. Example - While thirsty a person only drinks enough water to quench his or her thirst. Drawback - Estimation of how much is good enough may be mistaken. Temporizing Settling on an option that is good enough. Example - If a student had studied harder, he or she would have got better grades. But, the student feels it is good enough for the time being. Affect Making a decision based on one’s affective response. “Gut reaction” is a strong System-1 impetus toward the object. Example - “Oh, I like those shoes. . . . You know, they would look great with the blue jacket I bought.” Simulation Estimating the likelihood of a given outcome based on how easy it is to imagine that outcome. Example - “I don’t know what happened, sir!” said the sales representative to the manager after the failed presentation. “Yesterday I could see myself closing that deal.” Used to increase attitudes of self-efficacy.

Individual Cognitive Heuristics Availability Representation Association Stereotyping Individual Cognitive Heuristics Availability Estimating the likelihood of a future event based on a vivid memory of a past experience. Example - “I hate mushrooms. Once when I was a kid I got sick on mushrooms at a restaurant.” Representation Making the snap judgment that X is like Y in every way upon noticing that X is like Y in some way. Example - “My father and I were alike in so many ways. Dad died of lymphoma when he was 69. I probably have about 30 years before lymphoma gets me, too.” Self-monitoring and self-correcting one’s thinking helps ensure that conclusions are warranted. Association Connecting ideas based on word association and the memories, meanings, or impressions they trigger. Example - One person associates sunshine with happiness, and another person associates sunshine with sweaty work picking strawberries. Stereotyping Making a snap judgment about an entire group based on a single instance. Example - Grandparents are seen as loving caretakers. Profiling groups based on unfortunate experiences with some of its members can lead to bigotry, prejudice, misunderstanding, and mistrust.

Individual Cognitive Heuristics Us vs. them Power differential Anchoring with adjustment Illusion of control Individual Cognitive Heuristics Us vs. them Reducing decisions to the choice between two starkly opposing options and then rejecting option the opposition favors. Example - “Those who are not with me are against me.” Power Differential Accepting a superior authority’s beliefs, problems or solutions without question. Example - Social hierarchies abound at home, at work, in government, in religion, and in recreation. Anchoring with Adjustment After an evaluation, adjusting only as much as required and only if new evidence is presented. Illusion of control Estimating the control an individual has over events. Assessed by the amount of energy and desire one puts into trying to shape the events. When misapplied it leads into making unrealistic snap judgments.

Explorer Explorer The explorer links to the Us vs. Them Heuristic. Voting is an important responsibility. A shift of 5% one way or the other can empower a party to have control of the U.S. Senate, or to win the governorship of a state. In statewide and national elections, political parties use wedge issues, like gay marriage, immigration, and marijuana legalization, play on one’s System-1 heuristic thinking.

Individual Cognitive Heuristics Optimistic bias Hindsight bias Elimination by aspect Loss and risk aversion All or nothing Individual Cognitive Heuristics Optimistic Bias Tendency to underestimate risks and overestimate control in dangerous situations. Hindsight Bias Tendency to remember successful events as being the result of the decisions an individual made and past failures as having resulted from bad luck or someone else’s mistakes. Example - Tendency to take undeserved credit for good outcomes or to shift responsibility to others for undesirable outcomes. Elimination by aspect Eliminating an option from consideration upon the discovery of one undesirable feature. Example - A person does not buy a particular car because he does not like its color. Loss and risk aversion Avoiding risk and avoiding loss by maintaining the status quo. Humans take an incremental approach rather than opting for dramatic change. All or nothing Simplifying decisions by not considering remote probabilities. Example - “I’ve ice-skated hundreds of times, so what are the chances that tonight I’ll fall and crack my skull?”

Discussion Question Discuss examples of when someone gave you advice about an important matter and their only argument was that your situation reminded them of their own or someone else’s situation Discussion Question Discuss examples of when someone gave you advice about an important matter and their only argument was that your situation reminded them of their own or someone else’s situation. The discussion should help generate real-life examples of how people use the availability heuristic.

Heuristics in Action Cognitive heuristics expedite one’s thinking by generating ideas, but not necessarily reflectively Heuristics in Action Cognitive heuristics expedite our thinking by generating ideas, but not necessarily reflectively. Work in tandem with one another. Example - Parents worry about their children getting sick from germs that may be lurking in the environment. The gut feeling “Germs = Bad!” is an example of affective heuristic. Illusion of control heuristic - Many parents set high standards for cleanliness for their children.

Heuristics and Possible Errors from Their Misapplication Based on the various heuristics discussed earlier, this table talks about possible errors when there is misapplication.

Heuristics and Possible Errors from Their Misapplication Based on the various heuristics discussed earlier, this table talks about possible errors when there is misapplication.

Heuristics and Possible Errors from Their Misapplication Based on the various heuristics discussed earlier, this table talks about possible errors when there is misapplication.

Sketchnote Video Sketchnote Video The video summarizes the risks and benefits of cognitive heuristic thinking.