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Software Forensics Centre © Darren Dalcher 1 Decisive and Incisive: Making Decisions in IT and project management Prof. Darren Dalcher Software Forensics Centre School of Computing Science Middlesex University
Software Forensics Centre © Darren Dalcher 2 Outline: decision making, bias, professional The link between decision making and bias Challenges in decision making Are you susceptible to biases? Framing questions Dealing with uncertainty Too many choices? Implications The way forward Professional decision making?
Software Forensics Centre © Darren Dalcher 3 What is bias? According to the Oxford Dictionary: A bias is a predisposition or prejudice. According to my sons English book it is a strong opinion for or against an idea. But are we susceptible to biases?
Software Forensics Centre © Darren Dalcher 4 Would you buy this house? This charming and unusual country cottage enjoys a quiet position at the end of an idyllic country lane. Its period features and unashamed old world style make it ideal for restoration by a loving owner. The property benefits from many original characteristics which could be further enhanced to suit your personal taste. The house stands in a very isolated position up a rough and unmade farm track. It is sadly neglected – the roof tiles are broken, the walls and ceiling crumbling and there is an urgent need for essential repairs. Inside most of the rooms there is evidence of rising damp. The whole property requires an urgent overhaul.
Software Forensics Centre © Darren Dalcher 5 The starting point Most of us do not make great decisions, and a few of us are aware of this fact. - Hoch & Kunreuther Today we are going to explore this area.
Software Forensics Centre © Darren Dalcher 6 Challenges in decision making Information overload Galloping rate of change Rising uncertainty Few historical precedents More frequent decisions More important decisions Conflicting goals More opportunities for miscommunication Fewer opportunities to correct mistakes Higher stakes (after Russo & Schemaker)
Software Forensics Centre © Darren Dalcher 7 Making decisions New play by Andrew Lloyd Webber, Rats You just bought a ticket for £50, seats not marked. You lost your ticket. Would you buy another? Situation 2: Going to see a play. Open wallet – lost £50 note. Would you still pay? Typically 62% buy ticket again (having made effort) 85% pay cash
Software Forensics Centre © Darren Dalcher 8 Gamble 1% chance of winning £10,000 50% chance of winning £400 Which option would you select? Expected Value 0.01 * £10,000 = £ * £400 = £200
Software Forensics Centre © Darren Dalcher 9 Bias Many decisions deviate from the optimal, rational result. The attempts to apply a rational strategy or approach are often flawed. The flaws are repeatable and can be attributed to consistent mistakes. These cognitive biases reduce the effectiveness of the decision maker affecting the acquisition, analysis and interpretation phases. This in turn affects the quality (and relevance) of the decision itself.
Software Forensics Centre © Darren Dalcher 10 What treatment would you prefer? Of 100 people having surgery, 10 will die during surgery, 32 will have died within one year and 66 will die within five years. Of 100 people having radiation therapy, none will die during treatment, 23 will die within one year, and 78 will die within five years. Of 100 people having surgery, 90 will survive the surgery, 68 will survive past one year, and 34 will survive through five years. Of 100 people having radiation therapy, all will survive the treatment, 77 will survive one year, and 22 will survive past five years.
Software Forensics Centre © Darren Dalcher 11 Can we trust professionals? New England Journal of Medicine Group of 369 boys were examined for possible tonsillectomy Step 1: Panel of doctors examined all boys Decision: 45% required tonsillectomy Step 2: New panel of doctors examined remaining boys (214) Decision: 46% needed tonsillectomy Step 3: New panel of doctors examined 116 doubly healthy boys Decision: 44% needed tonsillectomy
Software Forensics Centre © Darren Dalcher 12 Availability The decision maker uses only easily available information and ignores not easily available sources of significant information. Are there more seven letter words in the English language: n – i n g Consider a group of ten people: How many different committees of two? How many different committees of eight?
Software Forensics Centre © Darren Dalcher 13 Availability again Are there more words in the English language a. that begin with the letter R ? b. For which R is the third letter ? Most of us can recall words that begin with R. However, thinking of words that have R as the third letter is more difficult.
Software Forensics Centre © Darren Dalcher 14 Anchoring & adjustment Selecting an initial value as a starting point (could be average) and then adjusting the value improperly in order to accommodate the rest of the data. Provide a rapid guesstimate for: 1 * 2 * 3 * 4 * 5 * 6 * 7 * 8 = 8 * 7 * 6 * 5 * 4 * 3 * 2 * 1 = Medians typically are 512 and 2,250 Answer: 40,320
Software Forensics Centre © Darren Dalcher 15 Hiring a new engineer A newly hired engineer for a computer firm in the City of London area has four years experience and excellent qualifications. When asked to estimate the starting salary for this employee, my secretary (knowing very little about the profession or industry) guessed an annual salary of £23,000. What is your estimate of the salary?
Software Forensics Centre © Darren Dalcher 16 Hiring a new engineer II A newly hired engineer for a computer firm in the City of London area has four years experience and excellent qualifications. When asked to estimate the starting salary for this employee, my secretary (knowing very little about the profession or industry) guessed an annual salary of £85,000. What is your estimate of the salary?
Software Forensics Centre © Darren Dalcher 17 Some more unrelated anchoring What are the last three digits of your home phone number? Add 400 to the number above. In what year would you guess Attila the Hun was actually defeated? Range (number + 400)Mean 400 to to to to to
Software Forensics Centre © Darren Dalcher 18 Data Presentation The impact of summarised data and facts Would you undertake an action that will produce a 30% increase in the annual mortality risk? Would you undertake an action increasing your annual chances of death from 1 in 10,000 to 1.3 in 10,000?
Software Forensics Centre © Darren Dalcher 19 Buying a new item – adding features You are about to buy a new car for £22, and have just been tempted to add a new radio which will bring the total price to £22, (feeling that the difference is trifling) Is this a rational decision? Upon reflection you can see that you are about to be charged £ for a radio, which may be a touch excessive…
Software Forensics Centre © Darren Dalcher 20 Conservatism Failure to revise estimates (by as much as they should be) in light of new and significant information.
Software Forensics Centre © Darren Dalcher 21 Data saturation People often reach premature conclusions on the basis of too small a sample of information while ignoring the rest of the data that is received later.
Software Forensics Centre © Darren Dalcher 22 Self-fulfilling prophecies Selective perception occurs when a certain outcome, interpretation or conclusion is favoured and information that does not support this view is ignored. People often remember and attach higher validity to information which confirms their previously held beliefs and expectations. On the other hand they selectively ignore disconfirming information.
Software Forensics Centre © Darren Dalcher 23 Ease of recall Data which can be easily recalled or assessed is often used in estimates. An event is believed to occur frequently, that is with high probability, if it is easy to recall similar events. Direct experience and coverage by media can play a part.
Software Forensics Centre © Darren Dalcher 24 Fact-value confusion Strongly held values may often be regarded and presented as objective facts which are allowed to determine choices and affect decisions.
Software Forensics Centre © Darren Dalcher 25 Success/failure attribution Decision makers often associate success with personal ability or exceptional skills and failure with bad luck and unfavourable circumstances.
Software Forensics Centre © Darren Dalcher 26 Gamblers fallacy Assumptions regarding runs of probability and sequences of events that seem to suggest that a run of poor results will be followed by an extremely successful outcome.
Software Forensics Centre © Darren Dalcher 27 Habit Familiarity with a particular rule, method or approach may often lead to re-utilisation of the same procedure or the selection of a similar alternative when faced with a seemingly identical problem.
Software Forensics Centre © Darren Dalcher 28 Order effects The order in which items are presented affects information retention in memory. Typically the first piece of information presented (primacy effect) and the last one (recency effect) assume undue importance in the mind of the decision maker.
Software Forensics Centre © Darren Dalcher 29 Redundancy The more redundancy in the data, the more confidence people tend to place in their predictions.
Software Forensics Centre © Darren Dalcher 30 Hindsight People are often unable to think objectively if they receive information that an outcome has occurred and they are told to ignore this information. With hindsight outcomes that have occurred seem inevitable. Relationships and links are easier to form and predictions are often altered to reflect what we know occurred. Football results Lost in traffic? New employee in interview
Software Forensics Centre © Darren Dalcher 31 Using hindsight to sell Storer Cable Communication sent the following notice to subscribers in Louisville, Kentucky. Its not often you get good news instead of a bill, but we have got some for you. If youve heard all the rumours about your basic cable rate going up $10 or more a month, you can relax: Its not going to happen! The great news is … the rate for basic cable is increasing only $2 a month
Software Forensics Centre © Darren Dalcher 32 How consistent are you? You are in a shop about to buy a new watch which will cost £70. As you wait to pay, a friend walks past and tells you that an identical watch is available in another shop 10 minutes away for £40. You know that the service and reliability of the other shop are just as good as this one. Will you travel 10 minutes to save £30?
Software Forensics Centre © Darren Dalcher 33 How consistent are you? You are in a shop about to buy a new video camera which will cost £800. As you wait to pay, a friend walks past and tells you that an identical video camera is available in another shop 10 minutes away for £770. You know that the service and reliability of the other shop are just as good as this one. Will you travel 10 minutes to save £30?
Software Forensics Centre © Darren Dalcher 34 Framing questions - obtaining information Do you get headaches frequently, and if so how often?2.2 / week Do you get headaches occasionally, and if so how often?0.7 / week How many headache products have you tried? 1? 5? 10?5.2 products How many headache products have you tried? 1? 2? 3?3.3 products After Loftus (1975)
Software Forensics Centre © Darren Dalcher 35 Framing questions – changing facts? How long was the film?130 minutes How short was the film?100 minutes How tall was the player?79 inches How short was the player?69 inches After Harris (1973)
Software Forensics Centre © Darren Dalcher 36 Framing questions: the right time? Guardian survey Should Britain ever join the Euro? Join: 29%Not join: 52%undecided 19% Should Britain join as soon as conditions are right? Join: 46%
Software Forensics Centre © Darren Dalcher 37 Dealing with uncertainty Imagine you have just taken a very tough final examination. It is the end of the second semester, you feel tired and run-down, and you are not sure that you passed the exam. Failing the exam means a re-take after the summer break. You have an opportunity to buy a very attractive two week holiday package at an exceptionally low price. The special offer expires tomorrow, while the exam grades will not be available until the following day.
Software Forensics Centre © Darren Dalcher 38 Dealing with uncertainty Would you: (a) buy the package (b) not buy the package (c) pay a £10 non-refundable fee to retain the right to buy the package at the special promotional price (a) 32% (b) 7% (c)61%
Software Forensics Centre © Darren Dalcher 39 Pass/fail formulations Two additional formulations of the problem presented to groups of students: PassFailOriginal (a) buy54%57%32% (b) not buy16%12% 7% (c) pay £1030%31%61%
Software Forensics Centre © Darren Dalcher 40 Insurance/ Gamble and uncertainty Insurance Formulation Situation A: You stand a one out of a thousand chance of losing £1000. Situation B: You can buy insurance for £10 to protect you from this loss. Gamble Formulation Situation A: You stand a one out of a thousand chance of losing £1000. Situation B: You will lose £10 with certainty.
Software Forensics Centre © Darren Dalcher 41 Winning or losing? Imagine I have just given you £200. I now offer you more, in the form of one of two options: Option 1. I will give you an additional £100 Option 2. I will toss a fair coin. If it lands heads, I will give you an additional £200; if it lands tails, I will give you no additional money. Option 1. You must give me back £100 Option 2. I will toss a fair coin. If it lands heads, you must give me back £200; if it lands tails, you may keep all the money I gave you.
Software Forensics Centre © Darren Dalcher 42 Assigning values Imagine the UK is preparing for an outbreak of an unusual disease that is expected to kill 600 people. Two programmes to combat the disease have been proposed. A. If prog. 1 is adopted 200 people will be saved. B. If prog. 2 is adopted, there is a one-third probability that 600 people will be saved, and a two-thirds probability that no people will be saved. A. If prog, 1 is adopted 400 people will die. B. If prog. 2 is adopted, there is a one-third probability that nobody will die, and a two-thirds probability that 600 people will die.
Software Forensics Centre © Darren Dalcher 43 The blessing of choice Added choice tends to reduce the value of any single item When offered $1.50 for participating in a survey or a pen (they were told is worth $2), 75% of subjects chose the pen When offered $1.50 or a choice between the same pen and a set of cheaper felt-tipped pens, the majority went for the money (less than 50% chose any pen)
Software Forensics Centre © Darren Dalcher 44 The winners curse You are in a foreign country and meet a merchant who is selling you a very attractive diamond/rug… You have purchased a few of these … in your life, but are far from being an expert. After some discussion you make what you are sure is a very low offer. The merchant immediately accepts. How do you feel? Why would you voluntarily make an offer that you do not want accepted?
Software Forensics Centre © Darren Dalcher 45 Regret The problem is that you have less information than the other side. Buying a house Your agent tells you of another party about to make an offer. You were going to offer £200K, but now offer £220K which is accepted on the spot. How do you feel?
Software Forensics Centre © Darren Dalcher 46 A partial model of decision making
Software Forensics Centre © Darren Dalcher 47 Levels of bounded rationality
Software Forensics Centre © Darren Dalcher 48 About biases Get your facts first, and then you can distort them as much as you please Mark Twain
Software Forensics Centre © Darren Dalcher 49 Implications for our profession SwE BoK not enough Need to know about decision making? Decision Making a key competence? Licensing Professionals Responsibility and liability of engineers Do we need to teach decision making? Ethical issue – Objective DM? CPD in DM? Researchers: implications on how we ask questions?
Software Forensics Centre © Darren Dalcher 50 The way forward Think what is outside your view (assumptions) Be aware of anchoring View decisions from multiple perspectives Work with multiple sources of information Look at the complementary side Provide a range, not an isolated value Challenge your views and values Remain open to new (& conflicting) information Know the limits of your information (beyond facts) – confidence levels Remember we are all human!
Software Forensics Centre © Darren Dalcher 51 Summary The good The bad And the professional
Software Forensics Centre © Darren Dalcher 52 Dealing with people The biggest winner ever in the Spanish lottery was asked how he chose his winning ticket. He said he looked around for a ticket ending in the number 48 as he knew it would win Asked how he knew, he explained that… For seven nights he had a dream about the number seven, and as 7 * 7 is 48, he just went looking for the winner…
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