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Decision Making

Decision Making. Chapter 7. Definition of Decision Making. Characteristics of decision making: Selecting a choice from a number of options Some information available with respect to choices Time frame is relatively long > 1 sec Choice is associated with uncertinty.

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Decision Making

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  1. Decision Making Chapter 7

  2. Definition of Decision Making Characteristics of decision making: • Selecting a choice from a number of options • Some information available with respect to choices • Time frame is relatively long > 1 sec • Choice is associated with uncertinty

  3. Classical Decision Theory • Normative Decision Models – expected value of the outcome (win $50 with P .5). Optimizing choice from all possible. • Descriptive Decision Models – most decision makers violate the assumptions of normative decision making (optimum solution). Base decisions on simpler method of looking at a few options and selecting one that is acceptable (satisficing). Shifting to simplifying heuristics.

  4. Example Normative Decision Alternative State of Nature/Probability N1:Dry Hole N2:Sm Well N3:Big Well Expected p1=.6 p2=.3 p3=.1 Value A1:Don't Drill $ 0 $ 0 $ 0 $ 0 A2:Drill Alone -500,000 300,000 9,300,000 720,000 A3:Farm Out 0 125,000 1,250,000 162,500

  5. Heuristics and Biases

  6. Factors & Cognitive Limitations That Effect Decision Making • Amount or quality of cue information brought into working memory (WM) • Available decision making time • Attention Resources • Amount & quality of person’s LTM knowledge • Ability to retrieve relevant LTM information • WM capacity limitations

  7. Heuristics Definition – problem-solving by trial and error: a method of solving a problem for which no formula exists, based on informal methods or experience, and employing a form of trial and error iteration

  8. Heuristics Biases in Obtaining & Using Cues • Attention to a limited number of cues • Cue primacy – preliminary cues tend to carry more weight than follow-on cues is the primacy effect. • Inattention to later cues. • Cue salience (noticeable) bias. • Overweighting of unreliable cues or treating all cues as equal.

  9. Heuristic Biases in Hypothesis Generation • A limited number of hypotheses are generated. • Available heuristic – tendency to rely on recent or frequent heuristic. • Representativeness heuristic – judging an event as likely if it represents the typical features of a category • Overconfidence – believing you are correct more often than you really are

  10. Heuristic Biases in Hypothesis Evaluation & Selection • Cognitive fixation – once a hypothesis is generated there is a tendency to ignore subsequent cues. • Confirmation bias – seeking out confirming information and not disconfirming information.

  11. Heuristic Biases in Action Selection • Retrieval of a small number of actions from LTM. • Availability heuristic for actions – tendency to retrieve most available actions which is function of frequency and recency. • Availability of possible outcomes – tendency to base decisions on what you think are the best outcome consequences, not what they really are.

  12. Naturalistic Decision Making Definition: The way people use their experience to make complex decisions in a field setting. Problems tend to be: • Ill-structured • Uncertain, dynamic environments • Information rich environment where cues change rapidly • Cognitive processing with iterative/feedback loops • Multiple shifting and competing goals • Time constraints or time stress • High risk • Multiple persons involved in the decision

  13. Skill, Rule, & Knowledge Based Task Performance

  14. More Views of Naturalistic Decision Making • Cognitive Continuum Theory – decision process occurs along a continuum from intuition to analysis • Situation Awareness – perception of elements in environment within a volume of time & space, comprehension of their meaning, & projection of their near future status • Recognition-Primed Decision Making – experts recognize a pattern & recall a single course of action • Schemas, Stories, & Mental Models – analytical processing begins with situation assessment which yields 2nd level situation awareness where a mental representation is constructed. Representation is called a story or mental model.

  15. An Integrated Model of Real-World Decision Making

  16. Improving Human Decision Making • Redesign situation assessment environment for performance support • Training – Help people overcome heuristic biases • Decision Aids • Expert Systems – Using computers to capture the knowledge of experts to provide answers to the decision maker • Cognitive Support – Using computers as decision support systems. Any interactive support system that helps the decision maker

  17. Problem Solving Problem solving occurs when there is insufficient knowledge to readily make a decision and creative processes are required. • Characteristics • Person doesn’t have WM capacity • Person doesn’t have enough system knowledge • Person has system knowledge, but it is disconnected & unorganized • Errors & biases in problem solving (similar to biases in decision making) • Poor problem definition • Failure to generate the correct solution plan • Limitations of WM

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