1. Thinking, Deciding and Problem Solving
Are we good at it?

2. Solve it:
A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?
A man bought a horse for $60 and sold it for $70. Then he bought the same horse back for $80 and again sold it for $90. How much money did he make in the horse business?

3. Depends on…. Type of problem Our cognitive resources
Is the problem ill defined
or well defined? Leading to more or less obvious solutions.
Is the task presented in a format that fits our strategy?
Our cognitive resources
How much knowledge do we have, how is the knowledge organized, can we access it?
Sometimes prior knowledge and experience helps and other times interferes.

4. Freqs Vs Probs
We excel at estimating frequencies, defining categories, and making similarity judgments, but we do not make probability judgments very well.
how often things occur, not how likely
For example, “10 out of every 1,000 women actually have breast cancer.” instead of “1% of women actually have breast cancer.”

5. Are we THIS rationale?

6. Focus of the class today: Common Errors in problem solving
We often don’t have the time, energy, or resources to solve everyday problems step-by-step
Emotional information strongly influences our decision making, even when we are not aware of it.
Errors in decision making often take the form of biases and heuristic reasoning.

7. Logic & belief bias Argument 1:
General premise: Elephants are bigger than mice.
Specific premise: Dogs are bigger than mice.
Conclusion: Therefore, elephants are bigger than dogs.
Argument 2:
General premise: Mice are bigger than dogs.
Specific premise: Dogs are bigger than elephants.
Conclusion: Therefore, mice are bigger than elephants

8. Algorithm
Algorithm
methodical, logical rule or procedure that guarantees solving a particular problem
contrasts with the usually speedier–but also more error-prone--use of heuristics

9. Heuristics Heuristics
simple thinking strategy that often allows us to make judgments and solve problems efficiently
usually speedier than algorithms
more error-prone than algorithms

10. Thinking S P L O Y O C H Y G Unscramble Algorithm Heuristic
all 907,208 combinations
Heuristic
How did you solve it?

11. Heuristics
Which of the following is the more frequent cause of death in the US?
All accidents or Strokes? -- How sure are you?
Which country has the highest population?
Myanmar or Australia? -- How sure are you?
Saudi Arabia or Morocco? -- How sure are you?
Which city has the highest crime rate?
Manhattan, NYC or Durham NC? -- How sure are you?
Answers:
Per 1,000: All Accidents (35.9) vs Strokes (61.4)
Myanmar (42 million), Australia (19 million)
Saudi Arabia (23 million), Morocco (31 million)
Manhatten (184), Durham (238) 11

12. Heuristics Availability bias
In one chapter of a best-selling novel, would you expect to find more words that end in ing (——-ing) OR b. have n as the second to last letter (——-n-)?
Availability bias
Vivid Cases are not more frequent!
People taking advantage of welfare.

13. Heuristics Availability bias
In one chapter of a best-selling novel, would you expect to find more words that end in ing (——-ing) OR b. have n as the second to last letter (——-n-)?
Availability bias
Vivid Cases are not more frequent!
People taking advantage of welfare.

14. Heuristics
Linda is 31, single, outspoken and very bright. She majored in philosophy in college. As a student, she was deeply concerned with discrimination and other social issues, and she participated in antinuclear demonstrations. Which statement is more likely?
A. Linda is a bank teller
B. Linda is a bank teller and active in the feminist movement.

15. Heuristics Conjunction fallacy
decreasing probability of all things being true of person

16. Representativeness Heuristics
My cousin Rudy is a bit on the peculiar side. He has unusual tastes in movies and art, he is married to a performer. He has tattoos on various parts of his body. In his spare time Rudy takes yoga classes and likes to collect 78 rpm records. An outgoing and rather boisterous person, he has been known to act on a dare on more than one occasion. What do you think his occupation most likely is?
Farmer, Librarian, Trapeze Artist, Surgeon, or Lawyer

17. Representativeness Heuristics
judging the likelihood of things in terms of how well they seem to represent, or match, particular prototypes
may lead one to ignore other relevant information

18. Framing Effects the way an issue is posed.
If the second part of the horse buying demonstration was about firewood…
Examples: What is the best way to market ground beef--as 25% fat or 75% lean? Who should be denied custody versus given?
If you add 15% more yellow to the green on the package people report that the taste experience has a lot more lemon

19. Sunk-cost fallacy When people make decisions about a
current situation based
on what they have
previously invested
in the situation.
1$ for $5

20. Confirmation Bias Confirmation Bias
tendency to search for information that confirms one’s preconceptions
2 groups: Group A “Find out if the interviewee is an introvert” -- Group B: “Find out if the interviewee is an extravert”

21. Other error sources Overconfidence
tendency to be more confident than correct
tendency to overestimate the accuracy of one’s beliefs and judgments
Belief Perseverance
Clinging to one’s initial conceptions after the basis on which they were formed has been discredited.

22. The Matchstick Problem
How would you arrange six matches to form four equilateral triangles?

23. Functional Fixedness
tendency to think of things only in terms of their usual functions
impediment to problem solving