Straight Choices: The Psychology of Decision Making

Description

Straight Choices provides a fascinating introduction to the psychology of decision making, enhanced by discussion of relevant examples of decision problems faced in everyday life. Thoroughly revised and updated throughout, this edition provides an integrative account of the psychology of decision-making and shows how psychological research can help us understand our uncertain world. The book emphasizes the relationship between learning and decision-making, arguing that the best way to understand how and why decisions are made is in the context of the learning and knowledge acquisition which precedes them, and the feedback which follows. The mechanisms of learning and the structure of environments in which decisions are made are carefully examined to explore their impact on our choices. The authors then consider whether we are all constrained to fall prey to cognitive biases, or whether, with sufficient exposure, we can find optimal decision strategies and improve our decision making. This edition highlights advances made in judgment and decision making research, with additional coverage of behavioral insights, nudging, artificial intelligence, and explanation-based decision making. Written in a non-technical manner, this book is an essential read for all students and researchers in cognitive psychology, behavioral economics, and the decision sciences, as well as anyone interested in the nature of decision making. Cover Half Title Title Page Copyright Page Dedication Contents Preface to the Third Edition Acknowledgements 1. Falling Off the Straight and Narrow Our Approach and the Plan of this Book Decisions, Decisions... Which Medical Treatment Should I Choose? Is This Person Guilty or Innocent? How Should I Invest My Money? Summary 2. Decision Quality and a Historical Context Intuitions About Decision Quality A Formal Approach to Decision Quality A Brief History of Judgement and Decision Research Decisions Judgements New Frontiers Summary 3. Stages of Judgement I: Discovering, Acquiring, and Combining Information Conceptualizing Judgement: The Lens Model Discovering Information Acquiring Information Ordering Search Combining Information Compensatory Strategies Non-compensatory Strategies Empirical Tests of Fast-and-Frugal Strategies Resource Rational Summary 4. Stages of Judgement II: Feedback Effects and Dynamic Environments Learning from Feedback Simply Right or Wrong: Outcome Feedback Feedback or Feedforward? Why Is Feedback Sometimes (In)effective? Decision Making in Dynamic Environments Summary 5. Appraising Probability Judgements Correspondence vs. Coherence Criteria The Laws of Probability as Coherence Criteria Are Coherence Criteria Sufficient? Correspondence Criteria for Probability Judgements Bayesian Model of Probability Updating Bayesian Updating in Medical Diagnosis Bayesian Updating in Legal Reasoning Reasoning with DNA Evidence Interim Summary Confusing Coherence with Correspondence Updating Beliefs with Multiple Variables Summary Note 6. Judgemental Heuristics and Biases Attribute Substitution and Natural Assessments Errors of Coherence Base Rate Neglect The Conjunction Fallacy Are Conjunction Errors Due to Evidential Support? The Disjunction Problem Support Theory Description Dependence Support Subadditivity Evidence For and Against Support Theory Errors of Correspondence Availability Cascaded Inference Section Summary The Frequency Effect The Nested-Sets Hypothesis Reconciliation Theoretical Confusion The Importance of Conditional Probabilities and Systematic Sampling Frequentists offer no Account for Probability Biases Summary of Debate about the Frequency Effect Summary 7. Explanation-Based Decision Making The Story Model of Juror Decision Making Applying the Causal Model Framework Modelling a Child Abuse Case Applying the Framework to the Johnson Case Reasoning About the Evidence Do People Reason in Accordance with CBNs? Summary 8. Analysing Decisions I: A General Framework A Framework for Analysing Decisions Acts, States, and Outcomes Utilities Probabilities Maximizing Expected Utility Why maximize? Status of the Decision Framework The Axioms of Expected Utility Theory The Sure-Thing Principle The Allais paradox Extensions of the Allais problem Ellsberg's problems Ambiguity aversion Summary 9. Analysing Decisions II: Prospect Theory and Preference Reversals Reference-Dependence The Value Function The Isolation Effect Losses Loom Larger than Gains The Fourfold Pattern Decision Weights The Certainty Effect Framing Ambiguity Aversion or Ignorance Aversion How Good a Descriptive Model Is Prospect Theory? Decision by Sampling Interim Summary Preference Reversals Compatibility and Evaluability Context Effects Effect of Experience on Preference Reversals Summary 10. Decisions From Experience The 'Money-Machine' A Description-Experience Gap Biased Samples or Mode of Presentation Why Underweighting in Repeated Consequential Decisions? Modelling Experience-Based Choice Beyond the Description-Experience Gap Summary 11. Decisions Across Time Hindsight and Other Time-Related Biases Predicting Pleasure and Pain Section Summary Direct Effects of Time Discount Rates Anticipated Emotions Setting Deadlines Summary 12. Learning to Choose, Choosing to Learn Learning in Simple Choice Problems Probability Matching The Linear Model Choices Informed by Multiple Cues Choice Rules Deep Learning for Pattern Recognition Deep Learning and Human Decision Making Reinforcement Learning Summary 13. Optimality and Expertise How Close Can a Decision Maker Get to Optimality? Can Experts Overcome Decision Biases? Expertise Naturalistic Decision Making Summary 14. Two Systems of Judgement and Decision Making? Characteristics of the Two Systems Competing Systems - Parallel Process or Default Intervention? Evidence for Two Systems or Theoretical 'Stone Soup'? The 'Best Evidence' for Dual-Process Theories Awareness, Insight, and Unconscious Influences The Legacy of Nisbett and Wilson Insight in Multiple Cue Judgement Decisions Under Uncertainty, but Outside of Awareness? Criteria for the Assessment of Awareness Deliberation without Attention? Summary 15. Emotional Influences on Decision Making Direct Effects of Emotion Affective Forecasting Emotion as a Driver of not Wanting to Know Do Our Emotions Precede Our Decisions? The Affect Heuristic and Risk as Feelings Imagery, Affect, and Decisions Providing the Image Summary 16. Group Decision Making Intellective and Judgement Tasks Achieving a Consensus Harnessing the Wisdom of the Crowd Groupthink: Model, Evidence, and Beyond Summary 17. Applying Psychological Insights to the World Outside the Laboratory Mental Rules: Inside, Outside, and Opposite Thinking Adopting the Outside View Consider the Opposite Mechanical Rules to Help Us Decide Algorithm Aversion or Appreciation? Nudging our Way to Better Decisions? Making Sense of Failures Boost or Nudge? Summary 18. Learning to Make Good Decisions: When, How, and Why (Not)? When Does Decision Making Improve? How and Why Does Decision Making Improve? Concluding Remarks References Index