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23 Cards in this Set
- Front
- Back
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What was the focus of rational decision making? |
Logic, objectivity, and analysis over subjectivity and insight. |
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When do you use naturalistic decision making? |
When time is short. |
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Human decision making is often based on _____ rather than calculation. |
Heuristics |
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What is cognitive biases? |
An error in thinking or decision making caused by misapplication of a cognitive heuristic. |
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True or false: cognitive biases and logical fallacies are the same thing. |
False |
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What is the difference between a logical fallacy and a cognitive bias? |
A logical fallacy stems from an error in a logical argument. A cognitive bias is rooted in thought processing errors often arising from problems with memory, attention, attribution, and other mental mistakes. |
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What are availability heuristics? |
Placing to great a value on information that comes to your mind quickly. i.e. my dog died in December therefore dogs die all the time. |
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What is the framing effect? |
The principle that our choices are influenced by the way they are framed through different wording, settings, and situations. |
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What is negative versus positive framing? |
A loss is perceived as heavier, and thus more worthy of avoiding, than an equivalent gain. |
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What is sunk cost effect? |
We are afraid to pull out of some thing we have put effort into. i.e. wars in Afghanistan and Iraq |
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What is the endowment effect? |
Greater value is placed on items owned than the purchase of the item. |
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What is hindsight bias? |
The tendency for people to believe that they predicted the outcome of an event that is indeterminate. i.e. when someone assumes an outcome of an event and it unfolds close to how they said it would, now they think they are a prophet. |
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What is the gamblers fallacy? |
Assuming probability of an outcome is dependent on past outcomes when it is not. i.e. Flip a quarter and it hits heads five times straight. Saying the next time has to be tails. |
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The gamblers fallacy is also called what? |
Monte Carlo fallacy |
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What is the opposite of the gamblers fallacy? |
The hot hand fallacy |
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What is Illusory superiority/overconfidence? |
People think they are better, smarter, etc. than they actually are. |
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What is the planning fallacy? |
Underestimation of the time required to complete a task. It is expanded to include underestimation of cost and over estimation of benefit. i.e. the Sydney opera house estimated at $7 million, cost $102 million and was 10 years late. It also resulted in a scaled down version. Another example is people underestimating the amount of time for graduates to complete thesis. |
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What is the Dunning-Kruger effect? |
An individual fails to recognize their lack of ability or expertise at a specific task or function. Persons with this bias not only produce below average results, they are also extremely difficult to provide feedback to as they firmly believe they’re already above average. i.e. a study of high tech firms discovered that 32 to 42% of software engineers rated their skills as being in the top 5%. |
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What is anchoring? |
The reliance on a piece of information in decision making. More times than not it is the reliance on the first bit of information. The impact leads to one making estimations from a starting point. Depending on the starting point, adjustments will be made that are most likely insufficient. i.e. when selling an item, one sets the initial price high. This causes the buyer to work from that price when considering an offer. This can be done in reverse as well. |
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What is the IKEA effect? |
People describe a higher value to something that they added labor to that resulted in the “successful completion of the task“. i.e. original box cake mixes required no additional ingredients and were not well received. When the formula was changed to require the addition of an egg, then the general public was more receptive to the product regardless of any actual difference in quality. |
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What is confirmation bias? |
The tendency to seek, interpret, or favor information in a way that supports one’s existing ideas, beliefs, or a hypothesis on a certain topic, regardless of whether they are true or not. |
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What is the impact of confirmation bias on cognition and decision making? |
It prevents an individual from looking at situations objectively. Causes overconfidence and leads to faulty choices. Affects how we search, gather, interpret, and recall information. |
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What is cognitive tunneling? |
A more severe version of cognitive bias. You lock onto one thing and ignore everything else. This shows up in troubleshooting in stressful situations. i.e. 3 mile island |
