Exploring Judgment and Decision Making Theories

1. Decision making and reasoning Asma Kanwal Lecturer Department Of Computer ScienceGC University Lahore

2. Judgment and Decision Making • The goal of judgment and decision making is to select from among choices or to evaluate opportunities 1. Classical Decision Theory • Based on the assumption or rationality • People make their choices so as to maximize something of value, whatever that something may be • Mathematical models of human decision making • Too restricted, does not take into account the psychological makeup of each individual decision maker

3. Classical Decision Theory Subjective expected utility theory • The goal of human action is to seek pleasure and avoid pain; in doing so each of us uses calculations of • We always try to maximize pleasure called positive utility and minimize pain called negative utility • Subjective utility – based on the individual’s judged weightings of utility, rather than on objective criteria • Subjective probability – based on the individual’s estimates of likelihood, rather than on objective statistical computations This theory is based on the belief that people seek to reach well-reasoned decisions based on • Consideration of all possible known alternatives • Use of a maximum amount of available information • Careful assessing of costs and benefits and calculation of probability • A maximum degree of sound reasoning

4. Classical Decision Theory Humans are not completely rational nor irrational, we show bounded rationality, Satisficing • Rather, we consider options one by one, and then we select an option as soon as we find one that is satisfactory or just good enough to meet our minimum level of acceptability Elimination by Aspects • We focus on one aspect (attribute) of the various options, and we form a minimum criterion for that aspect • We then eliminate all options that do not meet that criterion Heuristics and Biases • When we use the heuristic of representativeness, in which we judge the probability of an uncertain event according to • (1) how obviously it is similar to or representative of the population from which it is derived • (2) the degree to which it reflects the salient features of the process by which it is generated

5. Reasoning People start with information and come to conclusions that go beyond that information • Deductive reasoning • When the information you have is correct, you can necessarily reach a conclusion. • Inductive reasoning You can arrive at conclusions about what is probably true.

6. Deductive reasoning Deductive reasoning, also deductive logic, logical deduction or, informally, "top-down" logic, is the process of reasoning from one or more statements (premises) to reach a logically certain conclusion.

7. Deductive reasoning • Conditional Reasoning • Syllogism

8. Conditional reasoning In conditional reasoning the reasoner must draw a conclusion based on a conditional, or “if…then,” proposition. If antecedent is met then consequent follows If p then q, p therefore q • Obama is the president of the US. • Only natural-born citizens of the US can serve as a president of the United States. Conclusion: Obama is a natural-born US citizen. • Arnold is not a natural-born US citizen. Conclusion: Arnold cannot be a president of the US.

9. Conditional reasoning

10. Wason selection test If a card has vowel on one side, it must have even number on other side. Which cards must be turned to confirm whether the rule is followed,

11. Wason selection test The cards must be A and 7.

12. Wason selection test

13. Wason selection test

14. Inductive-deductive reasoning

15. deductive reasoning

16. deductive reasoning IF A PERSON IS MARRIED MALE, HE MUST BE 18 AND ABOVE. MARRIED MALE UNMARRIED MALE 45 16

17. Syllogism reasoning A syllogism “conclusion, inference” is a kind of logical argument that applies to arrive at a conclusion based on two or more propositions that are asserted or assumed to be true. • Premises and categorical syllogisms • Premise 1: All birds are animals. • Premise 2: All animals eat food. Conclusion: All birds eat food.

18. Syllogism reasoning

19. Inductive-deductive reasoning

20. Inductive Reasoning • Inductive reasoning is reasoning in which the premises seek to supply strong evidence for the truth of the conclusion. The truth of the conclusion of an inductive argument is probable, based upon the evidence given. Key Points • In inductive reasoning, which is based on our observations, reaching any logically certain conclusion is not possible • The most we can strive to reach is only a strong, or highly probable, conclusion • A key feature of inductive reasoning, which forms the basis of the empirical method, is that we cannot logically bound from saying

21. Inductive reasoning examples • All chickens that we have seen have been brown; so, all chickens are brown. • All cars in this town drive on the right side of the street. Therefore, all cars in all towns drive on the right side of the street. • John is an excellent swimmer. John's family has a swimming pool. John's sister Mary must also be an excellent swimmer. • All basketball players in your school are tall, so all basketball players must be tall. • All brown dogs in the park are small dogs. Therefore, all small dogs are brown. • All children in the day care center like to play with Legos. All children, therefore, enjoy playing with Legos. • Every time you eat peanuts, your throat swells up and you can't breath. So, you are allergic to peanuts. • All cats that you have observed purr. Therefore, every cat must purr. • Two-thirds of the students at this college receive student aid. Therefore, two-thirds of all college students receive student aid.