Rational Choice in an Uncertain World : The Psychology of Judgment and Decision Making

by Reid Hastie

• ISBN13: 9781412959032
• ISBN10: 1412959039
• Edition: 2nd
• Format: Paperback
• Copyright: 2009-11-17
• Publisher: SAGE Publications, Inc

Summary

'œ The authors are highly respected as leading figures in the field of judgment and decision making. There are many existing books on topics related to judgment and decision making, but this book makes a unique contribution to this field because of its systematic and scholarly approach, and its breadth of coverage.' - Robert Goldstone, Indiana University 'œ Reid Hastie and Robyn Dawes are two of the most eminent researchers in the field. I know these authors to be excellent writers and I have no doubt that their writing style will be suitable for my students. ' -William Goldstein, University of Chicago In the new edition of this award-winning text, renowned authors Reid Hastie and Robyn Dawes compare and contrast the basic principles of rationality with actual behavior in making decisions. This book explores theories and research findings from the field of judgment and decision making in a non-technical manner, using anecdotes as a teaching device. Intended as an introductory textbook for advanced undergraduate and graduate students, the material not only is of scholarly interest but is practical as well. New to This Edition Chapter introductions, conclusions, and cross-references between chapters make the text more student friendly An abundance of examples from areas such as finance, medicine, law, and engineering anchor concepts to the real world Increased consideration of descriptive, psychological models of decision making augment the original emphasis on normative, rational, 'œExpected Utility Theory' models, bring the book up to date Balance among the three major approaches to judgment and decision making: cognitive psychological analyses of mental processes and heuristics, descriptive algebraic models of judgment and decision processes, and rational models of decision making

Table of Contents

Thinking and Deciding

Decision Making Is a Skill

Thinking: automatic and Controlled

The Computational Model of the Mind

Through the Darkest Psychoanalytical Theory and Behaviorism to Cognition

Quality of Choice: Rationality

The Invention of Modern Decision Theory

What Is Decision Making?

Definition of a Decision

Picturing Decisions

Decision Quality, Revisited

Incomplete Thinking: A Legal Example

Over-Inclusive Thinking: Sunk Costs

The Rationality of Considering Only the Future

The Rest of This Book

A General Framework for Judgment

A Conceptual Framework for Judgment and Prediction

Research With the Lens Model Framework

Capturing Judgment in Statistical Models

How Do Statistical Models Beat Human Judgment?

Practical Implications of the Surprising Success of the Linear Model

Objections and Rebuttals

The Role of Judgment in Choices and Decisions

The Fundamental Judgment Strategy: Anchoring and Adjustment

Salient Values

Anchoring and (Insufficient) Adjustment

Anchoring on Ourselves

Anchoring the Past in the Present

Judging Heuristically

Going Beyond the Information Given

Estimating Frequencies and probabilities

Availability of Memories

Biased Samples in Memory

Biased Sampling From Memory

Availability to the Imagination

From Availability to Probablility and Causality

Judgment by Similarity: Same Old Things

Representative Thinking

The Ratio Rule

Explanation-Based Judgments

Everyone Likes a Good Story

The Conjunction Probabliity Error (Again)

Judging From Explanations

Legal Scenarios: The Best Story Wins in the Courtroom

Scenarios About Ourselves

Scenarios About the Unthinkable

Hindsight: Reconstructing the Past

Sometimes It's Better to Forget

Chance and Cause

Misconceptions About Chance

Illusions of Control

Seeing Causal Structure Where It Isn't

Regression Toward the Mean

Reflections on Our Inability to Accept Randomness

Thinking Rationally About Uncertainty

What to Do About the Biases

Getting Started Thinking in Terms of Probabilities

Comprehending the Situation Being Judged

Testing for Rationality

How to Think About Inverse Probabilities

Avoiding Subadditivity and Conjunction Errors

The Other Side of the Coin: The Probability of a Disjunction of Events

Changing Our Minds: Bayes's Theorem

Statistical Decision Theory

Concluding Comment on Rationality

Evaluating Consequences: Fundamental Preferences

What Good is Happiness?

The Role of Emotions in Evaluations

The Value of Money

Decision Utility -- Predicting What We will Value

Constructing Values

From Preferences to Choices

Deliberate Choices Among Complex Alternatives

Ordering Alternatives

Grouping Alternatives

Choosing Alternatives

How to Make Good Choices

A Rational Decision Theory

Formally Defining Rationality

Making Theories Understandable -- The Axiomatic Method

Defining Rationality: Expected Utility Theory

Traditional Objections to the Axioms

The Shoulds and Dos of the System

Some Bum Raps for Decision Analysis

A Descriptive Decision Theory

Non-expected Utility Theories

Gain-Loss Framing Effects

Loss Aversion

Look to the Future

What's Next? New Directions in Research on Judgment and Decision Making

The Neuroscience of Decisions

Emotions in Decision Making

The Rise of Experimental Methods to Study Dynamic Decisions

Do We Really Know Where We're Headed?

In Praise of Uncertianty

Uncertainty as Negative

The Illusion of Hedonic Certainty

The Price of Denying Uncertainty

Two Cheers for Uncertainty

Living With Uncertainty

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