3. Thinking and Decision Making

Key concepts 

Thinking: is the process of using knowledge and information to make plans, interpret the world, and make predictions about the world in general.

Decision making: is the process of identifying and choosing alternatives based on the values and preferences of the decision-maker.

Dual process model: Proposed by Kahneman.

·      This model proposes that there are two basic systems of thinking-- an intuitive, experiential, affective system (System I) and/or an analytical, rational system (System II).

·      System 1 is an effortless, and unconscious way of thinking. It is fast and efficient but prone to mistakes. People used it to solve daily tasks, such as verbal communication and reading comprehension.

·      System 2 is a conscious and rational way of thinking, it requires more effort and time, but it is more correct. For example, when we are solving a complex math problem, we are using system 2 thinking.

·      People tend to use system 1 more in our daily life, simply because we are lazy thinkers who want to finish the task with less effort and time.

Anchoring effect: the tendency to rely on the first piece of information when one makes decision.

CRT: cognitive reflection task. It measures whether one people use fast thinking (incorrect) or slow thinking (correct).

 

Study:

 

Tversky

Point: emphasize system 1

First study – link dual process model.

·      Aim: To investigate the influence of anchoring bias on decision-making.

·      Design:

o   sort participant evenly to two conditions.

o   First condition will show participant an ascending multiplication from number 1 to 8.

o   Second condition will show participant a decreasing multiplication from number 8 to 1.

o   They have only 5 seconds to estimate the product of the problem.

·      Result:

o   The median for those offered by the “ascending group” was 512, “descending group” was 2250. The actual product was 40320.

o   One’s process of decision making is influenced by anchoring bias.

·      Link-back:

o   In the first group, the few numbers that appears to the participant are small, like 1, 2, and 3. On the other hand, the few numbers that appears to the participants in second group are large, such as 6, 7, 8. The first group get a smaller estimated product than the second group.

o   This proves the anchoring bias that people tend to rely on the first piece of information.

·      Evaluation:

o   The study is simplistic and easy to replicate. This is a lab experiment, which means the procedure will be standardized and highly in detailed. The researcher can make a video or slideshow to present all the details and instructions. Makes replicable and makes the study reliable.

o   The study uses independent sample design which fails to control participant variability. People assigning to different groups may have different experience in math education. Some group did faster and makes result inaccurate. To eliminate this confounding variable, researcher could use matched pair design.

 

Atler

Point: emphasize system 2

If we heavily rely on system 1 thinking, we are likely to make mistakes. Under circumstances, system may be used.

·      Aim: to investigate how font affect one’s thinking.

·      Design:

o   participants will be evenly divided into two groups to take the CRT.

o   Condition1: the fluent font CRT test – easy and condition2: the disfluent font CRT test – difficult.

·      Result & Conclusion:

o   participants answered more questions correctly on the harder (disfluent) CRT test.

o   The harder and disfluent font will force people to use system 2 to think rationally about those questions.

·      Link-back:

o   condition1 used system 1 because easy task; hence, less effort spends while more errors

o   condition2 used system 2 because complicated task; hence, more effort spends while less errors

·      Evaluation

o   The study is well controlled, which could eliminate all the extraneous variables and infers causation. Lab condition, no environmental factors. Have a control group as a reference, the only things that changed is the front, question are presented in the same way. This infers causation between font and CRT tests results.

o   However, this study has sampling bias. The study recruit’s participant only from Princeton university. Princeton students are younger and have training in coping cognitive task. The result from them will not represent a larger population. To solve this problem, researcher can hire more participant from a more diversified occupation and age.