Judgment and Behavioral Decision Theory

PS_K03

The main goal of the seminar is to broadly evaluate how behavioral judgments and decision makings are proceeded in terms of cognitive processes and mental representations and to concretely discuss the well-known fallacies of a few behavioral decision theories. The seminar starts by a brief outline of heuristics and biases which deal with probability and quantity judgments. Then, a number of what can be called heuristic or complex biases are chosen to discuss.

The seminar covers the following biases and fallacies:

(1) the anchoring bias (Furnham & Boo, 2011);

(2) the base rate neglect in the cab problem in a context such as predicting the medical diagnosis problem (Koehler, 1996);

(3) the interactions between the conjunction fallacy and memory for the Linda problem (Brainerd, Holliday, Nakamura & Reyna, 2014; cf., Lu, 2016);

(4) biases by the framing effect in risky decisions (Kahneman & Tversky, 1984);

(5) the interactions between the hindsight bias and memory (Blank, Nestler, von Collani & Fischer, 2008);

(6) the preference reversal phenomenon, that is, people's systematically inconsistent preference under different but formally equivalent measures (Tversky, Slovic, & Kahneman, 1990);

(7) the majority rule for the choice between binary, weak-dominant multi-attribute options in individual and group decision making (Lu, & Nieznański, 2017);

(8) Overconfidence in cross-cultural studies;

(9) Gigerenzer and his colleagues’ arguments on heuristics as ecological rationality (Gigerenzer, 2000; Goldstein & Gigerenzer, 2002).

Blank, H., Nestler, S., von Collani, G., & Fischer, V. (2008). How many hindsight biases are there? Cognition, 106, 1408-1440. https://doi.org/10.1016/j.cognition.2007.07.007

Brainerd, C. J., Holliday, R. E., Nakamura, K., & Reyna, V. F. (2014). Conjunction illusions and conjunction fallacies in episodic memory. Journal of Experimental Psychology: Learning, Memory, and Cognition, 40, 1610–1623. http://dx.doi.org/10.1037/xlm0000017

Furnham, A., & Boo, H. C. (2011). A literature review of the anchoring effect. Journal of Socio-Economics, 40, 35-42. http://dx.doi.org/10.1016/j.socec.2010.10.008

Gigerenzer, G. (2000). Adaptive Thinking: Rationality in the Real World. Oxford University Press.

Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: The recognition heuristic. Psychological Review, 109, 75-90. http://dx.doi.org/10.1037//0033-295X.109.1.75

Kahneman, D., & Tversky, A. (1984). Choices, values and frames. American Psychologist, 39, 341-350. http://dx.doi.org/10.1037/0003-066X.39.4.341

Klein, G. A. (2009). Streetlights and Shadows: Searching for the Keys to Adaptive Decision Making. Cambridge: MIT Press.

Koehler, J. J. (1996). The base rate fallacy reconsidered: Descriptive, normative and methodological challenges. Behavioral and Brian Sciences, 19, 1-53. http://dx.doi.org/10.1017/S0140525X00041157

Lu, Y. (2016). The conjunction and disjunction fallacies: Explanations of the Linda problem by the equate-to-differentiate model. Integrative Psychological and Behavioral Science, 50, 507-531. http://dx.doi.org/10.1007/s12124-015-9314-6

Lu, Y., & Nieznański, M. (2017). Regulatory focus and self-construal as determinants of the majority rule in individual decision making. Studia Psychologica, 59(4), 280-294. doi: http://doi.org/10.21909/sp.2017.04.745

Ranyard, R., Crozier, W. R., & Svenson, O. (Eds.). (1997). Decision Making: Cognitive Models and Explanations. London and New York: Routledge.

Tversky, A., Slovic, P., & Kahneman, D. (1990). The cause of preference reversal. American Economic Review, 80, 204-271.

Knowledge: Participants know the main fallacies and rules of decision making, Skills: Students are able to interpret empirical research from scientific journals concerning these topics.

Attitudes: Participants are ready to self-standing gathering of knowledge depending on appearing new findings and methods in research literature.

ECTS:

Classes attendance: 30

Preparation for classes and presentations: 40

Preparation for an essay: 30

Sum: 100

ECTS points: 4

Each participant’ work is being evaluated according to his or her presentations (2 times preferable) chosen from related judgmental decision-making topics, activity, and a short essay (ca. 1,000 words) written at the end of the semester on a specific topic (e.g., an expanded literature review on the presentation or even an experimental report are warmly welcomed). A minimum of 71% from the total score is needed. Please be noted that there is no examination.

Grades:

100%-95%...5

94%-89%...4,5

88%-83%...4

82%-77%...3,5

76%-71%...3

70% and less…2