judgments and decisions psych 253

Judgments and DecisionsPsych 253

Professor Jon Baron baron@psych.upenn.eduOffice: C7 Solomon

Office Hours: TBA and by appt

Professor Barb Mellers mellers@wharton.upenn.eduOffice C1 Solomon

Office Hours: Thursdays 1:30 to 3:00 pm and by appt

The syllabus is on Jon Baron’s webpage.

Teaching Assistants

Ann Marie Roepke aroepke@psych.upenn.edu• Office: 3701 Market Street, suite 203 (second floor,

Positive Psychology Center) • Office hours: Wed 3:30-5:00

Justin Landy landyj@psych.upenn.edu• Office: C16 Solomon• Office hours: TBA

Assignments and GradingReading, thinking, and class attendance influence your grades on everything else…

• 30% Midterm: Oct 5th 2 – 3:30 pm• 30% Homework Assignments and Discussion

Paper • 40% Final Exam: Dec 16th 6 – 8 pm

Goal

• To teach you some principles of good judgment and decision making, to show you where people go astray, to suggest ways to avoid errors and biases, and to explore with you some implications of the theories and findings for real world problems.

Normative Decision Making

How people should make decisions when they want to be rational, obey the rules of probability and statistics, be logical, and be consistent

Descriptive Decision Making

How people actually do make decisions within the limits of their cognitive capacities

Prescriptive Decision Making

The best advice we can provide others who want to make rational decisions given our understanding of actual human decision making.

Topics in this CourseMulti-attribute Decisions Decision Analysis Probability Hypothesis TestingValue of Information Logic Irrational Belief Persistence Subjective Well-Being Money and Happiness UtilityReference-Dependent Choice Risk Intertemporal Choice Moral thinking Utilitarianism Perceptions of FairnessNegotiations Social Dilemmas Voting Expert Decision MakersLinear Models of Judgment Tools for Debiasing

What is a decision?

What are the components of a decision?

1. Alternatives (actions, acts, options)2. States of nature3. Outcomes (consequences)4. Utilities (psychological value of outcomes)5. Goals (rules for deciding how to decide)

Decisions Under Certainty (Riskless Decisions): One state of nature associated with an option (probability = 1)

Decisions Under Risk: Multiple states of nature with known probabilities associated with an option

Decisions Under Uncertainty: Multiple states of nature with unknown probabilities associated with an option

Decisions Under Conflict: Outcomes depend on the choice of an opponent (rather than states of nature)

Types of Decisions

• What is it that makes decision making so hard?

• What is a good decision?

• How would you KNOW if a decision you made was a good decision?

• Decisions ≠ Outcomes (Decisions are what we control. Outcomes are what happen.)

• Good decisions can have bad outcomes, and good outcomes can arise from bad decisions.

In most courses on judgment and decision making, you will learn that:

Whether a decision is good or bad depends on how you made it, not what happened.

Criteria for Evaluating Decisions

Coherence = consistency with principles of logic, probability, and rational principles.

Correspondence = accuracy (similarity between predictions and real world)

With coherence, the focus is on process. With correspondence, the focus is on outcome.

Which cells are most conducive to learning?

Good

Good

Bad

Bad

Outcome

Process

Example of a Coherence (Process) Study

Students were given pairs of hypothetical marriage partners and judged which of the two potential partners they preferred. Each partner was described in terms of his or her intelligence, looks, and wealth.

• X is very intelligent, plain looking, and well off.• Y is intelligent, very good looking and poor.

• Y is intelligent, very good looking and poor.• Z is fairly intelligent, good looking, and rich.

• Z is fairly intelligent, good looking, and rich.• X is very intelligent, plain looking, and well off.

Example of Coherence (Process) Study

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 also participated in anti-nuclear demonstrations.

Which is more probable?• Linda is a bank teller.• Linda is a bank teller and is active in the feminist

movement.

Example of a Correspondence (Outcome) Study

I will ask you to think about 10 questions. Your goal is not to get the exact answer, but rather to give a high and low estimate such that you are 90% sure that the correct answer falls within that range. You can go as high or low as you like. The challenge is to select a range that is neither too narrow nor too wide. If you succeed, you will have 9 correct answers and 1 error. That means you are correct 90% of the time.

1. Weight of an empty Airbus A240-600 (in kilograms or tons) Low = ________High = ________

2.Year that John Steinbeck won the Nobel Prize for literature Low = ________

High = ________

3. Distance (in kilometers or miles) from the Earth to the Moon Low =________High =________

4. Air distance (in kilometers or miles) from Madrid to Baghdad Low =________

High = ________ 5. Year the construction of the Roman Coliseum was completed Low

=________High = ________

6. Year that Magellan's crew completed the first naval circumnavigation of the globe Low =________ High = ________

7. Height (in meters or feet) of the Aswan High DamLow = ________ High = ________

8. Year that Mohandas K. Gandhi was bornLow = ________ High = ________

9. Surface (in square kilometers or miles) of the Mediterranean Sea

Low = ________ High = ________ 10. Gestation period of the great blue whale in days

Low = ________ High = ________