Book•
Rational choice in an uncertain world : the psychology of judgment and decision making
01 Jan 2010-
TL;DR: In this article, a general framework for judgment and prediction is presented, along with a discussion of the role of human judgment in decision-making and its role in making good decisions.
Abstract: Chapter 1 - Thinking and Deciding 1.1 Decision Making Is a Skill 1.2 Thinking: automatic and Controlled 1.3 The Computational Model of the Mind 1.4 Through the Darkest Psychoanalytical Theory and Behaviorism to Cognition 1.5 Quality of Choice: Rationality 1.6 The Invention of Modern Decision Theory Chapter 2 - What Is Decision Making? 2.1 Definition of a Decision 2.2 Picturing Decisions 2.3 Decision Quality, Revisited 2.4 Incomplete Thinking: A Legal Example 2.5 Over-Inclusive Thinking: Sunk Costs 2.6 The Rationality of Considering Only the Future 2.7 The Rest of This Book Chapter 3 - A General Framework for Judgment 3.1 A Conceptual Framework for Judgment and Prediction 3.2 Research With the Lens Model Framework 3.3 Capturing Judgment in Statistical Models 3.4 How Do Statistical Models Beat Human Judgment? 3.5 Practical Implications of the Surprising Success of the Linear Model 3.6 Objections and Rebuttals 3.7 The Role of Judgment in Choices and Decisions Chapter 4 - The Fundamental Judgment Strategy: Anchoring and Adjustment 4.1 Salient Values 4.2 Anchoring and (Insufficient) Adjustment 4.3 Anchoring on Ourselves 4.4 Anchoring the Past in the Present Chapter 5 - Judging Heuristically 5.1 Going Beyond the Information Given 5.2 Estimating Frequencies and probabilities 5.3 Availability of Memories 5.4 Biased Samples in Memory 5.5 Biased Sampling From Memory 5.6 Availability to the Imagination 5.7 From Availability to Probablility and Causality 5.8 Judgment by Similarity: Same Old Things 5.9 Representative Thinking 5.10 The Ratio Rule Chapter 6 - Explanation-Based Judgments 6.1 Everyone Likes a Good Story 6.2 The Conjunction Probabliity Error (Again) 6.3 Judging From Explanations 6.4 Legal Scenarios: The Best Story Wins in the Courtroom 6.5 Scenarios About Ourselves 6.6 Scenarios About the Unthinkable 6.7 Hindsight: Reconstructing the Past 6.8 Sometimes It's Better to Forget Chapter 7 - Chance and Cause 7.1 Misconceptions About Chance 7.2 Illusions of Control 7.3 Seeing Causal Structure Where It Isn't 7.4 Regression Toward the Mean 7.5 Reflections on Our Inability to Accept Randomness Chapter 8 - Thinking Rationally About Uncertainty 8.1 What to Do About the Biases 8.2 Getting Started Thinking in Terms of Probabilities 8.3 Comprehending the Situation Being Judged 8.4 Testing for Rationality 8.5 How to Think About Inverse Probabilities 8.6 Avoiding Subadditivity and Conjunction Errors 8.7 The Other Side of the Coin: The Probability of a Disjunction of Events 8.8 Changing Our Minds: Bayes's Theorem 8.9 Statistical Decision Theory 8.10 Concluding Comment on Rationality Chapter 9 - Evaluating Consequences: Fundamental Preferences 9.1 What Good is Happiness? 9.2 The Role of Emotions in Evaluations 9.3 The Value of Money 9.4 Decision Utility -- Predicting What We will Value 9.5 Constructing Values Chapter 10 - From Preferences to Choices 10.1 Deliberate Choices Among Complex Alternatives 10.2 Ordering Alternatives 10.3 Grouping Alternatives 10.4 Choosing Alternatives 10.5 How to Make Good Choices Chapter 11 - A Rational Decision Theory 11.1 Formally Defining Rationality 11.2 Making Theories Understandable -- The Axiomatic Method 11.3 Defining Rationality: Expected Utility Theory 11.4 Traditional Objections to the Axioms 11.5 The Shoulds and Dos of the System 11.6 Some Bum Raps for Decision Analysis Chapter 12 - A Descriptive Decision Theory 12.1 Non-expected Utility Theories 12.2 Gain-Loss Framing Effects 12.3 Loss Aversion 12.4 Look to the Future Chapter 13 - What's Next? New Directions in Research on Judgment and Decision Making 13.1 The Neuroscience of Decisions 13.2 Emotions in Decision Making 13.3 The Rise of Experimental Methods to Study Dynamic Decisions 13.4 Do We Really Know Where We're Headed? Chapter 14 - In Praise of Uncertianty 14.1 Uncertainty as Negative 14.2 The Illusion of Hedonic Certainty 14.3 The Price of Denying Uncertainty 14.4 Two Cheers for Uncertainty 14.5 Living With Uncertainty
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TL;DR: Adult Decision-Making Competence appears to be a distinct construct relevant to adults' real-world decisions and less likely to report negative life events indicative of poor decision making, as measured by the Decision Outcomes Inventory.
Abstract: The authors evaluated the reliability and validity of a set of 7 behavioral decision-making tasks, measuring different aspects of the decision-making process The tasks were administered to individuals from diverse populations Participants showed relatively consistent performance within and across the 7 tasks, which were then aggregated into an Adult Decision-Making Competence (A-DMC) index that showed good reliability The validity of the 7 tasks and of overall A-DMC emerges in significant relationships with measures of socioeconomic status, cognitive ability, and decision-making styles Participants who performed better on the A-DMC were less likely to report negative life events indicative of poor decision making, as measured by the Decision Outcomes Inventory Significant predictive validity remains when controlling for demographic measures, measures of cognitive ability, and constructive decision-making styles Thus, A-DMC appears to be a distinct construct relevant to adults' real-world decisions
756 citations
TL;DR: The too-much-of-a-good-thing effect (TMGT) as discussed by the authors is a meta-theoretical principle that suggests that antecedent variables widely accepted as leading to desirable consequences actually lead to negative outcomes.
716 citations
TL;DR: It is shown that there are only a few points within laparoscopic cholecystectomy where the complication-causing errors occur, which suggests that focused training to heighten vigilance might be able to decrease the incidence of bile duct injury.
Abstract: Bile duct injuries are the main serious technical complication of laparoscopic cholecystectomy. 1,2 Data are insufficient to determine precisely the frequency of bile duct injuries, but a reasonable estimate is one in 1,000 cases. 2 A decade ago, as the technique of laparoscopic cholecystectomy was first being learned by otherwise fully trained, practicing surgeons, the injury rate was noted to be greater during an individual’s first dozen cases than in subsequent ones. 2 This learning curve contribution is now much less important, for surgical residents learn the procedure under direct supervision of more experienced surgeons.
Surgeons have always analyzed their technical complications for insights that might be translated into improved performance. In the past the information available from such reviews could rarely go much beyond a tabulation of results. An understanding of the root causes of technical complications remained elusive. This report takes analysis of technical complications to greater depths, for it integrates the findings of videotapes of operations involving bile duct injuries, operative notes dictated after the operation had been completed but before an injury had become apparent, and conceptual tools of human factors research and the cognitive science of human error.
715 citations
TL;DR: In this article, the authors compare the effects of reputation and celebrity on the likelihood that a firm announces a positive or negative earnings surprise, and investors' reactions to these surprises, and find that firms that have accumulated high levels of reputation (high-reputation) are less likely, and firms that achieved celebrity (celebrity firms) more likely to announce positive surprises than firms without these assets.
Abstract: The effects of intangible assets on organizational outcomes remain poorly understood. We compare the effects of two intangible assets—firm reputation and celebrity—on (1) the likelihood that a firm announces a positive or negative earnings surprise, and (2) investors’ reactions to these surprises. We find that firms that have accumulated high levels of reputation (“high-reputation” firms) are less likely, and firms that have achieved celebrity (celebrity firms) more likely to announce positive surprises than firms without these assets. Both high-reputation and celebrity firms experience greater market rewards for positive surprises and smaller market penalties for negative surprises than other firms.
602 citations
Posted Content•
TL;DR: This article concludes with a strong recommendation for the mandatory electronic recording of interrogations and considers other possibilities for the reform of interrogation practices and the protection of vulnerable suspect populations.
Abstract: Recent DNA exonerations have shed light on the problem that people sometimes confess to crimes they did not commit. Drawing on police practices, laws concerning the admissibility of confession evidence, core principles of psychology, and forensic studies involving multiple methodologies, this White Paper summarizes what is known about police-induced confessions. In this review, we identify suspect characteristics (e.g., adolescence; intellectual disability; mental illness; and certain personality traits), interrogation tactics (e.g., excessive interrogation time; presentations of false evidence; and minimization), and the phenomenology of innocence (e.g., the tendency to waive Miranda rights) that influence confessions as well as their effects on judges and juries. This article concludes with a strong recommendation for the mandatory electronic recording of interrogations and considers other possibilities for the reform of interrogation practices and the protection of vulnerable suspect populations.
455 citations
References
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Book•
01 Jan 1944
TL;DR: Theory of games and economic behavior as mentioned in this paper is the classic work upon which modern-day game theory is based, and it has been widely used to analyze a host of real-world phenomena from arms races to optimal policy choices of presidential candidates, from vaccination policy to major league baseball salary negotiations.
Abstract: This is the classic work upon which modern-day game theory is based. What began more than sixty years ago as a modest proposal that a mathematician and an economist write a short paper together blossomed, in 1944, when Princeton University Press published "Theory of Games and Economic Behavior." In it, John von Neumann and Oskar Morgenstern conceived a groundbreaking mathematical theory of economic and social organization, based on a theory of games of strategy. Not only would this revolutionize economics, but the entirely new field of scientific inquiry it yielded--game theory--has since been widely used to analyze a host of real-world phenomena from arms races to optimal policy choices of presidential candidates, from vaccination policy to major league baseball salary negotiations. And it is today established throughout both the social sciences and a wide range of other sciences.
19,337 citations
TL;DR: This article reviews a diverse set of proposals for dual processing in higher cognition within largely disconnected literatures in cognitive and social psychology and suggests that while some dual-process theories are concerned with parallel competing processes involving explicit and implicit knowledge systems, others are concerns with the influence of preconscious processes that contextualize and shape deliberative reasoning and decision-making.
Abstract: This article reviews a diverse set of proposals for dual processing in higher cognition within largely disconnected literatures in cognitive and social psychology. All these theories have in common the distinction between cognitive processes that are fast, automatic, and unconscious and those that are slow, deliberative, and conscious. A number of authors have recently suggested that there may be two architecturally (and evolutionarily) distinct cognitive systems underlying these dual-process accounts. However, it emerges that (a) there are multiple kinds of implicit processes described by different theorists and (b) not all of the proposed attributes of the two kinds of processing can be sensibly mapped on to two systems as currently conceived. It is suggested that while some dual-process theories are concerned with parallel competing processes involving explicit and implicit knowledge systems, others are concerned with the influence of preconscious processes that contextualize and shape deliberative reasoning and decision-making.
3,859 citations
2,803 citations
TL;DR: Kahneman and Tversky as mentioned in this paper found that those who incurred a sunk cost inflated their estimate of how likely a project was to succeed compared to the estimates of the same project by those who had not incurred a sink cost.
2,257 citations
TL;DR: In this paper, two consumer strategies for the purchase of multiple items from a product class are contrasted, i.e., simultaneous choices/sequential consumption and multiple items on one shopping trip.
Abstract: Two consumer strategies for the purchase of multiple items from a product class are contrasted. In one strategy (simultaneous choices/sequential consumption), the consumer buys several items on one...
561 citations