Decision Making

Test Yourself: Decision Making and the Availability Heuristic 1) Which is a more likely cause of death in the United States: being killed by falling airplane parts or being killed by a shark?

Answer In the United States, the chance of dying from falling airplane parts is 30 times greater than dying from a shark attack. Because shark attacks receive more publicity and because they are easier to imagine (after seeing the film Jaws, for example), most people rate shark attacks as the more probable cause of death. Since information about shark attacks is more readily available, the availability heuristic helps explain why people overestimate the chances of dying in this unusual way.

2) Do more Americans die from a) homicide and car accidents, or b) diabetes and stomach cancer?

More Americans die from diabetes and stomach cancer than from homicide and car accidents, by a ratio of nearly 2:1. Many people guess homicide and car accidents, largely due to the publicity they receive and in turn, their availability in the mind.

3) Which claims more lives in the United States: lightning or tornadoes?

More Americans are killed annually by lightning than by tornadoes. Because tornadoes are often preceded by warnings, drills, and other kinds of publicity, the most common answer is tornadoes. The large amount of information about tornadoes, coupled with the availability heuristic, leads to the misconception that tornadoes are a more frequent cause of death.

Heuristics Are general problem-solving strategies that we apply to certain classes of situations Examples: 1.Means-ends analysis e.g. write 30 pages essay due in one month 2.Subgoal analysis e.g. frog game

In daily life we make decisions all the time What to buy Who to date Invest money Where to study Work We have to make them – but how do we? And what to we use to help ourselves?

Linda o Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and she also participated in anti-nuclear demonstrations. o Now, indicate which of the following hypotheses is likely to be most true: A: Linda is active in the feminist movement B: Linda is a bank teller C: Linda is active in the feminist movement and is a bank teller

Results  Most people choose feminist (A) and secondly bank teller and feminist (C) and last B – bank teller  study from 1982 done by Tversky (was a cognitive and mathematical psychologist, a pioneer of cognitive science) and Kahneman (is an Israeli-American psychologist and Nobel laureate, notable for his work on the psychology of judgment and decision-making, behavioral economics)  Due to illogical judgments  B is the correct choice – because everyone who is both a feminist and a bank teller is also simply a bank teller

Heuristics  The Representativeness heuristic – “what does it look (or seem) like? - we use it to infer how closely something or someone fits our prototype for a particular concept, or class, and therefore how likely it is to be a member of that class. Example: Linda  The Availability Heuristics – causes us to base judgments and decisions on the availability of information in memory. Example: choose the more likely cause of death: Murder or suicide?

Anchoring Bias Is the Mississippi river longer or shorter than 5000 miles and how long? Answered: shorter, average: 2000 miles Is the Mississippi river longer or shorter than 500 miles and how long? Answered: longer, average: 1000 miles Correct: 2348 miles Where can one make use of this to gain something?

Math to help you make your decisions! We are bad at making decisions. According to science, our decisions are based on oversimplification, laziness and prejudice. And that’s assuming that we haven’t already been hijacked by our surroundings or led astray by our subconscious! Horizon presents a guide to better decision making, and introduces you to Mathematician Garth Sundem, who is convinced that conclusions can best be reached using simple maths and a pencil!

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