Decision making fascinates me. In fact one of the reasons I entered into teaching and math specifically was to help the next generation with the skills to make better decisions. I viewed math as a tool that would develop their cognitive wherewithal. However decision making is more complicated than that.
Source of trouble | Brief Summary, aspects, characteristics | Evidence, Citations, Examples | How to mitigate, minimize, address |
Memory | We base a lot of our decisions on Memory. What we remember we did before, how we experienced something, or how we felt about what we experienced. The problem with this are many:
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Reconstructed Memory
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How to address this in the classroom:
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Two systems | We have two systems that process information.
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(Although 1 and 2 have a same outcome, yet people favor 1) (Ibid p.364) the problem is framed differently. |
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Halo Effect | When we are taken by someone or something, our perception of evidence surrounding that person is clouded.
We are quick to overlook fact or weight them inconsistently depending on whether we like or don’t like the person.
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Emotions | The emotional impact we feel affects our judgement.
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Heuristics | Heuristics allow us to quickly gauge or size up a situation without exact measurement. “If I had to ball park it….”
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Small Numbers | Large Samples are more precise than small samples. Small samples yield extreme results more often than large samples do. This misleads our read on patterns and may spark us to “misread” a situation. |
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The Anchor effect | Anchors prime our perspective and change our intuitive and perception of the circumstance.”Starting points affect versions of the ending point. If a person is fed certain input, the outcome is shaped by this.”We tend towards adjusting towards that anchor. |
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Experience is subjective | “The attentive person’s honest, real-time report is an imperfect approximation of her subjective experience, but it is the only game in town.”We frequently gauge our decisions by our happiness, perceived pleasure, or how we rank that experience of others….but it is different for everyone.The frequency and recency of our experience colors our interpretation and judgement.
When making a decision about something we’ve never done before we sometimes rely on the experience of others. However their internal measures for the “goodness” of an experience may be radically different than our own. Perception of the future and past is colored by our experience of today. (This affects our ability to make predictions) Our experience also informs our ability to “Prefeel” events. Which helps us decide on one course of action or another. |
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Context | Context affects our perception of an event.People may be making a judgement or decision without proper context.People tend to self sort.
This means they tend to live in communities, read material, and surround themselves with people who don’t challenge their values and don’t supply a diversity of thought.The values ingrained in us shape our context. Pacifists, religious zealots, or people from a culture a violence see their options differently and may come to different conclusions about what must be done. Media and coverage affect are view of frequent or important events. They specifically affect the availability of information which affects are associative process (the frequency of event A, with the risks of event A, with the potential reward of event A). In a word they affect our base rate knowledge. |
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Calculation Errors | People when making an assessment about the likelihood of an event or finding a percent of certainty. They need to know two things: the Part and the Whole. This ratio makes a fraction which can become a percent or probability. However many factors interfere with this:
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Logical Fallacies | Regression to the MeanCorrelation does not imply causation
Not all patterns continue or they could have multiple next steps We tend to ignore absences when finding patterns. |
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Overconfidence | We want to be right. No one wants to go through life being wrong all the time. We want to be right more often than not. Needless to say this is magnified by the stakes involved.Illusions of skill: (Stock Traders)Illusions of pundits: Experts performed worse than if they would have if they had simply assigned equal probabilities to each of the potential outcomes…Those who know more forecast very slightly better than those who know less. But those with the most knowledge develops an enhanced illusion of their skill and becomes unrealistically overconfident.
Optimistic Bias causes to give overly robust estimates to their plan. This also contributes to the Planning Fallacy. |
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Loss Aversion | We would rather win less than loose more. Organisms that treat threats as more urgent than opportunities have a better chance to survive. This causes people to make errors in value. |
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The Anchor effect | Next summary | Next Evidence | Next How to |
The Anchor effect | Next summary | Next Evidence | Next How to |
How do we combat poor decision making?
Strategy | Brief Summary, aspects, characteristics | Evidence, Citations, Examples |
Mathematical Modeling | Using a mathematical model or other algorithm frequently outperforms subjective heuristics and experts. | Paul Meehls work Clinical versus Statistical PredictionKahneman, Daniel, Thinking Fast and Slow (p. 229-231) |