Graphs

Week 4

Week four was about decision making under risk and uncertainty, as a group we were told to read the: The priority heuristic: making choice without trade-offs. To understand this article I read chapter 7 in Davids book and it simplified the subject. The start of the lecture David went to explain generally what decision making is all about and how people tend to make decision under risk and uncertainty. He also gave us some examples in gambling, how people tend to be more risk aversion when faced with options that has sure amount of money, but again in second alternative people becomes more risk seeking when presented with less money for certain. Then we further went into expected utility theory which means that we consider our wealth whenever we are making any decisions. The article we read were testing how accurately the heuristic predicts people’s choices, compared to previously proposed heuristics. According to Branstatter, E., and Gigerenzer, G., (2006), the reason for choosing are often negatively correlated with one another, high returns go with low probabilities, and low returns go with high probabilities, and Shanteau & Thomas, 2000 suggest that negative correlations between reasons cause people to experience conflict, leading them to make trade-offs. The topic of this week were very interesting as we face decision making during our daily life, and the decision we make is informed by our judgment. We were told to do an exercise to measure our utility. This two graphs show certainty and probability equivalence.

In my two graphs it shows that am risk averse when it comes to high amount of money, but again am risk seeking if the money i have is small and the winning price is higher. Which I think is common behavior among people generally, however it might differ for gamblers.

Week 3

Third week I missed the lecture due to personal issues, but my group made a presentation on the Reasoning the fast and frugal way: Models of bounded rationality article which was very difficult to understand in first reading but after several time it fall into place ( at least i hope so). The article went into details about how people make decision under time limit, and how an organism make logical judgment about unknown aspects of the environment. It provides different directions based on classical view that the laws of human are the law of probability and statistic. The Enlightenment view about probability theory and human reasoning remained strong within psychology and economist, but however recently heuristics and biases program stated that human inference is systematically biased and error prone, which leads to that the laws of inferences are quick and perhaps not good, but do not state the same about the laws of probability. This two different view agree that the laws of probability and statistics as normative but the argument is if human can stand up to these norms. Many experiments has been conducted based on this two different views, and trying to understand if the human mind appears more rational or irrational, and based on the experiments that been conducted the outcome would not simply fit in to the real world situation. A third theory came out focusing at the psychological and ecological aspect of inference, this view is looking at classical rationality as a universal norm, also questions the definition that the Enlightenment and the heuristic and bias were built upon. Simon 1956 came up with the model bounded rationality instead of classical rationality. He argues that information processing systems typically need to satisfice rather then optimize which means that an organism would choose the first satisfying object rather then taking time to rule out all the possibilities. The bounded rationality has two sides one cognitive and one ecological, and he emphasized that the minds are adapted to real world environments. However Simon view did not had a great impact in research on human inference, because they were often discredited. This paper will look into this field, the researchers looked at how these simple intelligent algorithms capable of making near optimal inferences by using simple psychological principles that satisfy the constraint of limited time, knowledge rather then those of classical rationality. They were designed to be fast and frugal without a significant loss of inferential. The task were involved question like, Which City has larger population? a) hamburg b) cologne, this kind of question requires knowledge and it has to be done in time limit. This paper really go in to deep about reasoning, and the most important result is that simple psychological mechanisms can have many correct inference in less time than standard statistical linear models that embody classical properties of rational inference. This paper illustrate that fast and frugal defeats the view that only rational algorithms can be accurate. It stated that the mind can have both ways.

I have to say I have written bit to much about this paper, mainly because I missed the lecture and now I got the chance to evaluate and make an understanding about it. I would probably say that it would been fairly easier to do it as a group, at least then you will have different views and you can discuss it as a group.

Week 1

First week was introduction to Judgment and decision making, we were told how the lecture will be assessed, and we were divided in groups up to six people or less. David also told us that we were expected to do a blogger and write a reflective on each week, and furthermore to do a class presentation ever week as a group on chosen article. Personally I think this will be every useful as we will get more in depth knowledge about this topic, and we will get a chance to enhance our presentation skills. In second year in cognitive psychology lecture the judgment and decision making was very interesting but bit difficult, I think this module will simplify and enhance my knowledge. I ended up in a group of six people, and we were told to read the Fast and Frugal article for next lecture which will take place the third week, due to cancellation on second week lecture.