Download Decision Making Theories - Introduction to Cognitive Science - Lecture Slides and more Slides Brain and Cognitive Science in PDF only on Docsity! Decision Making Theories • Normative theories: how a rational person ought to behave under optimal circumstances • Descriptive theories: how real people behave in the real world! Docsity.com Multi-Attribute Utility Theory (MAUT) • List all of your alternatives • Identify the important dimensions on which alternatives vary • Weight the attributes in terms of their importance • Determine the utility (subjective value) of each alternative, on each attribute Docsity.com Determine the utilities Alternative Make/ model Year Trans- mission Cost A Saturn 1998 Automatic $9,000 B Miata 2004 Manual $19,000 C Honda Accord 2000 Automatic $12,000 D Chevy Nova 1991 Automatic $1,000 2 1 1 1 5 2 1 3 5 5 5 1 1 3 4 5 2 4 3 5 Docsity.com An alternative’s Utility = Σ(weight x utility) 3 + 3 + 5 + (2x3) = 17 5 + 5 + 1 + (2x1) = 13 4 + 4 + 5 + (2x2) = 17 2 + 1 + 5 + (2x5) = 18 Alternative Make/ model Year Trans- mission Cost A Saturn 1998 Automatic $9,000 B Miata 2004 Manual $19,000 C Honda Accord 2000 Automatic $12,000 D Chevy Nova 1991 Automatic $1,000 Docsity.com Descriptive Models • Satisficing: Choose first alternative that satisfies your minimum criteria • Elimination by aspects: Rank order attributes; eliminate all alternatives that don’t meet your standards on the most important attribute, then the next most important, and so on Docsity.com Risky Decisions • Normative theory = expected utility theory • Similar to MAUT, but the “weights” in this case are probabilities • Example: decision to cut a class – “Risk” is that instructor will give a pop quiz – What is the probability that a quiz will occur? – What are the utilities of skipping/attending? Docsity.com EU = Σ(p x u) Quiz (p = .60) No quiz (p = .40) Skip class Miss quiz (u = -10) Have fun (u = +5) Go to class Take quiz (u = +5) No fun (u = 0) EU for skipping: ( .6 x -10) + ( .4 x 5) = -4 EU for going: ( .6 x 5) + ( .4 x 0) = 3 Docsity.com Problem: People don’t always follow expected utility! • Which would you prefer: – A sure $100 – A 50% chance to win $250 (and 50% to win $0) • Which would you prefer: – A sure grade of “B” – A 50% chance for an “A” and 50% for a “C” Docsity.com Framing Effects • “Asian disease problem” – 600 expected to die – Program A will save 200 people – Program B has a 1/3 probability of saving 600 and a 2/3 probability of saving 0 • Negative frame, same problem: – Program A: 400 people will die – Program B: 1/3 chance that 0 will die and 2/3 chance that 600 will die Docsity.com Descriptive Models of Risky Choice • Heuristics for judging probability – Availability – Representativeness – Anchoring and adjustment • Importance of the “reference point” in making risky choices – Utility for “wins” is different from the utility for “losses” Docsity.com Expertise in Decision Making • Characteristics of human “experts” – Flexibility; willingness to make adjustments – Consultation with colleagues – Consistently avoid large mistakes – Break problems into smaller subgoals – Makes use of experience! • Expert systems: make use of human experience to aid less “expert” decision-makers Docsity.com
