Bounded Rationality and Beyond
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News on the effects of bounded rationality in economics and business, relationships and politics
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When does ignorance make us smart? Additional factors guiding heuristi inference.

Abstract
“Fast & frugal” heuristics represent an appealing way of implementing bounded rationality and decision-making under pressure. The recognition heuristic is the simplest and most fundamental of these heuristics. Simulation and experimental studies have shown that this ignorance-driven heuristic inference can prove superior to knowledge based inference (Borges, Goldstein, Ortman & Gigerenzer, 1999; Goldstein & Gigerenzer, 2002) and have shown how the heuristic could develop from ACT-R’s forgetting function (Schooler & Hertwig, 2005). Mathematical analyses also demonstrate that, under certain conditions, a “less-is-more effect” will always occur (Goldstein & Gigerenzer, 2002). The further analyses presented in this paper show, however, that these conditions may constitute a special case and that the less-is-more effect in decision-making is subject to the moderating influence of the number of options to be considered and the framing of the question

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Use Neuroeconomics to Make a Business Case (Oren Klaff and Scott Mitchell)

In this session, Oren Klaff, deal-maker and best-selling author of Pitch Anything explains how neuroeconomics can be used to effectively and ethically pitch your initiative to the CFO and C-Suite.

At some point, we all need to present to the CFO (or finance committee) to fund our initiatives and ideas. Most fail to prepare for this correctly. Why? We like to think the CFO will judge our proposal carefully and objectively on its merits. 

They don't.

These busy executives must evaluate dozens of ideas and initiatives in a week, or even a day; and they are rarely willing to expend the effort necessary to look into your department and its economics. They classify initiatives in a matter of seconds. They use negative stereotyping to rapidly identify the no-go ideas.

Expert deal-maker Oren Klaff says that if you fall into the common "low status" negative stereotype, then your business case and pitch will be over before it even begins. In fact, many evaluations are strictly a process of elimination. In his experience, only 1% of ideas make it beyond the initial minutes of a pitch. This kind of elimination is easy for CFO's because they are highly analytical thinkers. To avoid fast elimination, successful executives -- and only 20% or less of those he observes do this -- raise their status, compress the pitch and use a 
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What the Internet is Doing to Young Minds — PsyBlog

What the Internet is Doing to Young Minds — PsyBlog | Bounded Rationality and Beyond | Scoop.it

87% of US teachers think the internet is creating a distracted generation. Is it really true? There’s no evidence that typical levels of internet use harms adolescent brains, according to a new review of 134 studies. On the contrary, the report, to be published in the journal Trends in Cognitive Science, finds some positives associated with normal internet use (Mills, 2014).

Many of the scare stories about the effects of the internet on the brain are based on studies of those using it excessively, which only affects around 5% of adolescents.

The perception that internet use is eroding young people’s attention spans certainly exists:

“Of the 2462 American middle- and high-school teachers surveyed by the Pew Research Center, 87% felt that widespread Internet use was creating an ‘easily distracted generation with short attention spans’ and 88% felt that ‘today’s students have fundamentally different cognitive skills because of the digital technologies they have grown up with’.” (Mills, 2014)

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Communicability reveals a transition to coordinated behavior in multiplex networks

Communicability reveals a transition to coordinated behavior in multiplex networks | Bounded Rationality and Beyond | Scoop.it

We analyze the flow of information in multiplex networks by means of the communicability function. First, we generalize this measure from its definition from simple graphs to multiplex networks. Then, we study its relevance for the analysis of real-world systems by studying a social multiplex where information flows using formal-informal channels and an air transportation system where the layers represent different air companies. Accordingly, the communicability, which is essential for the good performance of these complex systems, emerges at a systemic operation point in the multiplex where the performance of the layers operates in a coordinated way very differently from the state represented by a collection of unconnected networks.

 

Communicability reveals a transition to coordinated behavior in multiplex networks
Phys. Rev. E 89, 042819 – Published 30 April 2014
Ernesto Estrada and Jesús Gómez-Gardeñes

http://dx.doi.org/10.1103/PhysRevE.89.042819

 


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Is There a Development Gap in Rationality?

We report an experimental test of the four touchstones of rationality in choice under risk – utility maximization, stochastic dominance, expected-utility maximization and small-stakes risk neutrality – with students from one of the best universities in the United States and one of the best universities in Africa, the University of Dar es Salaam. Although the US and the Tanzanian subjects come from different backgrounds and face different economic prospects, they are united by being among the most able in their societies. Importantly, many of whom will exercise an outsized influence over economic and political affairs. We find very small or no significant differences between the two samples in the degree of rationality according to a number of standard economic measures. An alternative approach is to take cognitive ability (IQ) as a proxy for economic rationality. We show that a canonical IQ test indicates a much larger development gap in rationality relative to our economic tests.

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Shock waves on complex networks : Scientific Reports : Nature Publishing Group

Shock waves on complex networks : Scientific Reports : Nature Publishing Group | Bounded Rationality and Beyond | Scoop.it
Power grids, road maps, and river streams are examples of infrastructural networks which are highly vulnerable to external perturbations. An abrupt local change of load (voltage, traffic density, or water level) might propagate in a cascading way and affect a significant fraction of the network. Almost discontinuous perturbations can be modeled by shock waves which can eventually interfere constructively and endanger the normal functionality of the infrastructure. We study their dynamics by solving the Burgers equation under random perturbations on several real and artificial directed graphs. Even for graphs with a narrow distribution of node properties (e.g., degree or betweenness), a steady state is reached exhibiting a heterogeneous load distribution, having a difference of one order of magnitude between the highest and average loads. Unexpectedly we find for the European power grid and for finite Watts-Strogatz networks a broad pronounced bimodal distribution for the loads. To identify the most vulnerable nodes, we introduce the concept of node-basin size, a purely topological property which we show to be strongly correlated to the average load of a node.

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Eli Levine's curator insight, May 20, 2014 8:19 AM

Indeed, this is intuitive enough without the mathematics to back it up.  This could be mapped out and used for prioritizing the defense or attack of various points within the network, either in the digital or analog worlds.

 

Way cool science!

 

Think about it.

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Introduction to Neuroeconomics: how the brain makes decisions

Introduction to Neuroeconomics: how the brain makes decisions | Bounded Rationality and Beyond | Scoop.it

Economics, psychology, and neuroscience are converging today into a unified discipline of Neuroeconomics with the ultimate aim of providing a single, general theory of human decision making. Neuroeconomics provides economists, psychologists and social scientists with a deeper understanding of how they make their own decisions, and how others decide.

Watch Intro VideoInformazioni sul corso

Economics, psychology, and neuroscience are converging today into a unified discipline of Neuroeconomics with the ultimate aim of providing a single, general theory of human behaviour.

Neuroeconomics can provide economists and social scientists with a deeper understanding of how they make their own decisions, and how others decide. Are we hard-wired to be risk-adverse or risk-takers? How is a “fair decision” evaluated by the brain? Is it possible today to predict the purchasing intentions of a consumer? Can we modulate economic behaviour affecting the brain?

Neuroscience allied to psychology and economics have powerful models and evidence to explain why we make a decision… and whether it is rational or not. Decision-making in financial markets, trust and cooperation in teams, consumer persuasion, will be central issues in this course in neuroeconomics. You will be provided with the most recent evidence from brain-imaging techniques (PET, fMRI and TMS), and you will be introduced to the explanatory models behind them.

The course will start by discussing the foundations of neuroeconomics and the neuroanatomy of the brain (Module I: “How the brain works”).

Module II (“How the brain decides”) then focuses on the core building block of neuroeconomics: decision theory. In a simple way, you will be presented with the main theories accounting for how individuals decide, supported by key empirical studies.

The next module will study the balance between rationality and emotions (Module III: “How the brain feels”): how our emotions interfere with our so-called rational judgments.

Module IV (“Society of brains”) focuses on society: how groups and the social environment interact with individual decision-making. This module will have strong implications for marketing, public policy and public education.

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Tax evasion and cognitive dissonance

Abstract: We introduce public signals and cognitive dissonance into the standard Allingham-Sandmo- Yitzhaki (ASY) model of tax evasion. It turns out that the pres- ence of cognitive dissonance attenuates tax evasion as individuals dislike allowing their true bevhaviour to diverge from their public statement of the “admissible” degree of tax evasion, which, in turn, they use to influence the probability of detection. Some potential policy conclusions and extensions are discussed.

 
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Insensitivity to Prices in a Dictator Game

Abstract: We show that violations of demand theory are more numerous than previously reported in experimental two-player dictator games. We then apply a new procedure consisting of income-compensated price adjustments that makes the choice sets rationalizable. We introduce a “weighted price” function that shows that violations of revealed preference can be interpreted as the dictator's insensitivity to the price of the dictator's allocation relative to the responder's allocation. Our paper is the first to rationalize violations of demand theory in dictator games by examining the relationship between violations of GARP and prices. We suggest that weighted prices, and not only preferences, may be a component of decision making in dictator games

 

 

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How Attention Works: The Brain’s Anti-Distraction System Discovered — PsyBlog

How Attention Works: The Brain’s Anti-Distraction System Discovered — PsyBlog | Bounded Rationality and Beyond | Scoop.it

Attention is only partly about what we focus on, but also about what we manage to ignore. Neuroscientists have pinpointed the neural activity involved in avoiding distraction, a new study reports. This is the first study showing that our brains rely on an active suppression system to help us focus on the task at hand (Gaspar & McDonald, 2014).

The study’s lead author, John Gaspar, explained the traditional view of attentional control: This is an important discovery for neuroscientists and psychologists because most contemporary ideas of attention highlight brain processes that are involved in picking out relevant objects from the visual field. It’s like finding Waldo in a Where’s Waldo illustration.”

While this process is important, it doesn’t tell the whole story of how attention works.

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Homo Heuristicus: Why Biased Minds Make Better Inferences (2008)

Abstract

Heuristics are efficient cognitive processes that ignore information. In contrast to the widely held view that less processing reduces accuracy, the study of heuristics shows that less information, computation, and time can in fact improve accuracy. We review the major progress made so far: (a) the discovery of less-is-more effects; (b) the study of the ecological rationality of heuristics, which examines in which environments a given strategy succeeds or fails, and why; (c) an advancement from vague labels to computational models of heuristics; (d) the development of a systematic theory of heuristics that identifies their building blocks and the evolved capacities they exploit, and views the cognitive system as relying on an ‘‘adaptive toolbox;’ ’ and (e) the development of an empirical methodology that accounts for individual differences, conducts competitive tests, and has provided evidence for people’s adaptive use of heuristics. Homo heuristicus has a biased mind and ignores part of the available information, yet a biased mind can handle uncertainty more efficiently and robustly than an unbiased mind relying on more resource-intensive and general-purpose processing strategies.

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How to make cognitive illusions disappear: Beyond “heuristics and biases

Abstract

Abstract. Most so-called “errors ” in probabilistic reasoning are in fact not violations of probability theory. Examples of such “errors ” include overconfidence bias, conjunction fallacy, and base-rate neglect. Researchers have relied on a very narrow normative view, and have ignored conceptual distinctions—for example, single case versus relative frequency—fundamental to probability theory. By recognizing and using these distinctions, however, we can make apparently stable “errors ” disappear, reappear, or even invert. I suggest what a reformed understanding of judgments under uncertainty might look like. Two Revolutions Social psychology was transformed by the “cognitive revolution. ” Cognitive imperialism has been both praised (e.g., Strack, 1988) and lamented (e.g., Graumann, 1988). But a second revolution has transformed most of the sciences so fundamentally that it is now hard to see that it could have been different before. It has made concepts such as probability, chance, and uncertainty indispensable for understanding nature, society, and the mind. This sweeping conceptual change has been called the “probabilistic revolution ” (Gigerenzer et al., 1989; Krüger, Daston, & Heidelberger, 1987; Krüger, Gigerenzer, & Morgan, 1987). The probabilistic revolution differs from the cognitive revolution in its genuine novelty and its interdisciplinary scope. Statistical mechanics, Mendelian genetics,

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Behavioral Economics, Social Norms, Excessive Drinking and Why Everyone Wants to Be a 'Face in the Crowd'

Behavioral Economics, Social Norms, Excessive Drinking and Why Everyone Wants to Be a 'Face in the Crowd' | Bounded Rationality and Beyond | Scoop.it

Global Drug Survey runs the biggest drug survey in the world. The results of GDS2014, which received just short of 80,000 responses, (6,500 from the U.S.) were released on April 14. While we have a focus on illicit drugs, we never ignore that most permissive and accepted of drugs -- alcohol. So here is the third in a series of little blogs based on the findings of GDS2014 on how people understand their own drinking and how we can use that to reduce alcohol consumption and harm.

One of the most stunning findings from this year's Global Drug Survey was not only that 45 percent of people were unaware of their country's drinking guidelines but that on average 1 in 4 people who could be considered as dependent on alcohol (by scoring 20 or more on the World Health Organization's Alcohol Use Disorders Identification Test -- AUDIT) thought their drinking was average or less average. In addition, about one-third of this high risk group did not think their drinking placed them at high or extremely high risk of harm. How could it be that a group of predominantly well-educated people whose drinking placed them that a very high risk of harm and in the top 5-10 percent of drinkers in their country could be so "deluded"?

The answer lies in understanding some of common barriers to behavioral change and the way we choose to see ourselves to avoid dissonance and remain internally consistent. The first is that we all tend to overestimate our personal invulnerability to harm. Many smokers will say, "of course smoking kills -- other people, not me. I've got good genes." Holding this dangerous, usually inaccurate perception means we are less likely to put things in place to reduce our risk of harm. Another common way of avoiding the need to contemplate the need for change is to look to our friends and those around us (often rather selectively) to reassure ourselves that we are just like everyone else. When it suits us we adopt something called a "normative misperception" (in the case of heavy drinkers, believing your alcohol use is less than average) and it's a predictor of higher levels of alcohol use. We see examples of this self-serving perceptual bias every day and all of us do it. In the current example, it means heavier drinkers tend to think they are just like everyone else. If you don't want to think about changing your use of alcohol, thinking it's neither risky or particularly unusual, it is just the sort of selective evidence you need to make you comfortable in doing nothing. What was amazing was that this "delusional" group of drinkers were the ones most interested in how their drinking compared to others (over 85 percent compared to about 75 percent of everyone else). And that is interesting because it is says they might be open to be influenced by being more aware of what what other people usually do, that is the social norms.

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Not so fast! (and not so frugal!): rethinkin the recognition heuristic

Alessandro Cerboni's insight:

The ‘fast and frugal’ approach to reasoning (Gigerenzer, G., & Todd, P. M. (1999). Simple heuristics that make us smart. New York: Oxford University Press) claims that individuals use non compensatory strategies in judgment – the idea that only one cue is taken into account in reasoning.
The simplest and most important of these heuristics postulates that judgment sometimes relies solely on recognition. However, the studies that have investigated usage of the recognition heuristic have confounded recognition with other cues that could also lead to similar judgments. This paper tests whether mere recognition is actually driving the findings in support of the recognition heuristic. Two studies provide evidence that judgments do not conform to the recognition heuristic when these confounds are accounted for. Implications for the study of simple heuristics are discussed.

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The behavioralist as tax collector: Using natural field experiments to enhance tax compliance

Abstract: Tax collection problems date back to the earliest recorded history of mankind. This paper begins with a simple theoretical construct of paying (rather than declaring) taxes, which we argue has been an overlooked aspect of tax compliance. This construct is then tested in two large natural field experiments. Using administrative data from more than 200,000 individuals in the UK, we show that including social norms and public goods messages in standard tax payment reminder letters considerably enhances tax compliance. The field experiments increased taxes collected by the Government in the sample period and were cost-free to implement, demonstrating the potential importance of such interventions in increasing tax compliance.

 
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Here’s Why Believing People Can Change Is So Important in Life — PsyBlog

Here’s Why Believing People Can Change Is So Important in Life — PsyBlog | Bounded Rationality and Beyond | Scoop.it

How a growth mindset affects stress levels and health. Adolescents who believe people can change cope better with the challenges of attending high school, a new study finds. In contrast, those who believed that people’s personalities are fixed and unchangeable fared worse, suffering higher levels of stress and poorer physical health. The study’s authors were inspired by the idea that the high school years are a defining period in life: “Iconic films such as The Breakfast Club or Back to the Future depict teens as indelibly marked as “losers,” “jocks,” or “bullies”—labels that are thought to haunt them or buoy them throughout high school and into adulthood.” 

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‘What could be more interesting than how the mind works?’

‘What could be more interesting than how the mind works?’ | Bounded Rationality and Beyond | Scoop.it

Steven Pinker follows Sara Lawrence-Lightfoot, Martha Minow, and E.O. Wilson in the Experience series, interviews with Harvard faculty members covering the reasons they became teachers and scholars, and the personal journeys, missteps included, behind their professional success. Interviews with Melissa Franklin, Stephen Greenblatt, Laurel Thatcher Ulrich, Helen Vendler, and Walter Willett will appear in coming weeks.

 

The brain is Steven Pinker’s playground. A cognitive scientist and experimental psychologist, Pinker is fascinated by language, behavior, and the development of human nature. His work has ranged from a detailed analysis of how the mind works to a best-seller about the decline in violence from biblical times to today.

 

Raised in Montreal, Pinker was drawn early to the mysteries of thought that would drive his career, and shaped in part by coming of age in the ’60s and early ’70s, when “society was up for grabs,” it seemed, and nature vs. nurture debates were becoming more complex and more heated.

 

His earliest work involved research in both visual imagery and language, but eventually he devoted himself to the study of language development, particularly in children. His groundbreaking 1994 book “The Language Instinct” put him firmly in the sphere of evolutionary psychology, the study of human impulses as genetically programmed and language as an instinct “wired into our brains by evolution.” Pinker, 59, has spent most of his career in Cambridge, and much of that time at Harvard — first for his graduate studies, later as an assistant professor. He is the Johnstone Family Professor of Psychology.


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The Social Brain: Ralph Adolphs at TEDxCaltech - YouTube

Ralph Adolphs obtained his Ph.D. at Caltech in 1993, subsequently conducted postdoctoral work with Antonio Damasio in lesion patients, and has been on the fa...

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Want to Get Out Alive? Follow the Ants - Issue 13: Symmetry - Nautilus

Want to Get Out Alive? Follow the Ants - Issue 13: Symmetry - Nautilus | Bounded Rationality and Beyond | Scoop.it

On an evening in January A.D. 532, pandemonium broke out in the Constantinople Hippodrome, a U-shaped chariot racetrack surrounded by stadium stands. Two factions, the Greens and Blues—the predecessors of today’s soccer hooligans—broke into a fight. When the rest of the spectators dashed to escape, many became trapped by the rushing crowd, couldn’t reach the exits, and were trampled and killed. That incident was the start of the Nika riots that almost ended the rule of Eastern Roman emperor Justinian the Great.

Fifteen hundred years later, not much has changed. We still have stampedes, and still can’t get out of enclosed spaces properly. Since 2009, there have been fatal stadium stampedes in Morocco, Cote d’Ivoire, Bangkok, and Egypt. In their study of escape panic, Swiss physicist and sociologist Dirk Helbing concluded together with his colleagues that, “physical interactions in [a] jammed crowd add up and cause dangerous pressures… which can bend steel barriers or push down brick walls.”

Some animals evolved to clump together when threatened because it increased their chances of survival. “Predators have the ability to focus and concentrate on individual prey,” says Ralph Tollrian, a professor in Germany who has spent his career studying the predator confusion effect. “When they handle one prey, they can’t hunt the next.” Birds and fish form groups that move chaotically in the presence of a predator, giving it “cognitive overload,” says Randy Olson, who builds computer models of predator and prey behavior at Michigan State University. The predator’s cognitive overload can be so strong that it may give up on its pursuit entirely. “A confused predator can sometimes become frustrated and not hunt at all,” Tollrian says

 

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Using heuristics in economic decision making

USING HEURISTICS IN ECONOMIC DECISION MAKING - 

Andrijana Mušura - Zagreb School of Economics and Management, 

AbstractClassical economic theory considers a man as rational decision maker that takes into account all relevant information and makes decision that is optimal. This model of decision making was influential until it failed to predict and explain why people make irrational decisionsregarding money. Field of behavioral economics studies decision making that violates axiomsof rational decision-making model. The research we conducted is about prevalence of decisions under heuristics.
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Exposure to Risk and Risk Aversion: A Laboratory Experiment

Abstract: We examine whether prior exposure to environments with a varying degree of risk affects individuals’ risk-taking behavior. Using a laboratory experiment, we find that subjects exposed to a high risk environment exhibit higher levels of risk aversion than those who were exposed to a moderate or low risk environment. This effect is not driven by subjects’ realized outcomes from the risk. The finding has implications for theoretical models of decision-making under uncertainty, and can speak to a few current policy debates.

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How the brain pays attention - ScienceBlog.com

How the brain pays attention - ScienceBlog.com | Bounded Rationality and Beyond | Scoop.it

Neuroscientists identify a brain circuit that’s key to shifting our focus from one object to another.

Picking out a face in the crowd is a complicated task: Your brain has to retrieve the memory of the face you’re seeking, then hold it in place while scanning the crowd, paying special attention to finding a match.

A new study by MIT neuroscientists reveals how the brain achieves this type of focused attention on faces or other objects: A part of the prefrontal cortex known as the inferior frontal junction (IFJ) controls visual processing areas that are tuned to recognize a specific category of objects, the researchers report in the April 10 online edition of Science.

Scientists know much less about this type of attention, known as object-based attention, than spatial attention, which involves focusing on what’s happening in a particular location. However, the new findings suggest that these two types of attention have similar mechanisms involving related brain regions, says Robert Desimone, the Doris and Don Berkey Professor of Neuroscience, director of MIT’s McGovern Institute for Brain Research, and senior author of the paper.


Read more at http://scienceblog.com/71642/how-the-brain-pays-attention/#38AhYq7XIJOwJkLV.99

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İnternetten Para Kazanma's curator insight, May 14, 2014 4:22 AM

http://www.siyahpara.com/internetten-para-kazanma-siteleri/

Eli Levine's curator insight, May 14, 2014 9:17 AM

And it, like most other parts of your brain, is manipulable by exterior or interior stimuli that can throw you off course from where reality actually is.

 

Still, this could be helpful in determining new treatments for diagnosing and treating ADD and ADHD.  Very cool.

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Evaluation of the Priority Heuristic as a Descriptive Model of Risky Decision Making: Comment on Brandstätter, Gigerenzer, and Hertwig (2008)

Abstract

E. Brandstätter, G. Gigerenzer, and R. Hertwig (2006) contended that their priority heuristic, a type of lexicographic semiorder model, is more accurate than cumulative prospect theory (CPT) or transfer of attention exchange (TAX) models in describing risky decisions. However, there are 4 problems with their argument. First, their heuristic is not descriptive of certain data that they did not review. Second, their analysis relied on a global index of fit, percentage of correct predictions of the modal choice. Such analyses can lead to wrong conclusions when parameters are not properly estimated from the data. When parameters are estimated from the data, CPT and TAX fit the D. Kahneman and A. Tversky (1979) data perfectly. Reanalysis shows that TAX and CPT do as well as the priority heuristic for 2 of the data sets reviewed and outperform the priority heuristic for the other 3. Third, when 2 of these sets of data are reexamined, the priority heuristic is seen to make systematic violations. Fourth, new critical implications have been devised for testing the family of lexicographic semiorders including the priority heuristic; new results with these critical tests show systematic evidence against lexicographic semiorder models.

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Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes

Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes | Bounded Rationality and Beyond | Scoop.it

Every day, people are inundated with decisions, big and small. Understanding how people arrive at their choices is an area of cognitive psychology that has received attention. Theories have been generated to explain how people make decisions, and what types of factors influence decision making in the present and future. In addition, heuristics have been researched to understand the decision making process.

 

Several factors influence decision making. These factors, including past experience (Juliusson, Karlsson, & Gӓrling, 2005), cognitive biases (Stanovich & West, 2008), age and individual differences (Bruin, Parker, & Fischoff, 2007), belief in personal relevance (Acevedo, & Krueger, 2004), and an escalation of commitment, influence what choices people make. Understanding the factors that influence decision making process is important to understanding what decisions are made. That is, the factors that influence the process may impact the outcomes.

 

Heuristics serve as a framework in which satisfactory decisions are made quickly and with ease (Shah & Oppenheimer, 2008). Many types of heuristics have been developed to explain the decision making process; essentially, individuals work to reduce the effort they need to expend in making decisions and heuristics offer individuals a general guide to follow, thereby reducing the effort they must disburse. Together, heuristics and factors influencing decision making are a significant aspect of critical thinking (West, Toplak, & Stanovich, 2008). There is some indication that this can be taught, which benefits those learning how to make appropriate and the best decisions in various situations (Nokes &Hacker, 2007).

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Eli Levine's curator insight, May 13, 2014 9:17 AM

Indeed, there are many quirks and idiosynchrises that go into our day to day and long term decision making.  I wish there was a way to actually correct our "vision" and decision making tools, such that we are clairvoyent and have the energy and the actual will to do positive things for ourselves and the rest of the world that we're in.  But, then again, would humanity accept such a correction, or accept the people who would make such a correction?

 

I doubt it.

 

And thus, we will remain as the semi-evolved group of monkeys that we actually are.

 

Think about it.

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On Narrow Norms and Vague Heuristics A Reply to Kahneman and Tversky

This reply clarifies what G. Gigerenzers (e.g., 1991. 1994; Gigerenzer & Murray, 1987) critique of the heuristics-and-biases approach to statistical reasoning is and is not about. At issue is the imposition of unnecessarily narrow norms of sound reasoning that are used to diagnose so-called cognitive illusions and the continuing reliance on vague heuristics that explain everything and nothing. D. Kahneman and A. Tversky (1996) incorrectly asserted that Gigerenzer simply claimed that frequency formats make all cognitive illusions disappear. In contrast, Gigerenzer has proposed and tested models that actually predict when frequency judgments are valid and when they are not. The issue is not whether or not. or how often, cognitive illusions disappear. The focus should be rather the construction of detailed models of cognitive processes that explain when and why they disappear.

A postscript responds to Kahneman and Tversky's (1996) postscript.

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