Preferences and Decisions!!!

This week we looked at people’s preferences when making decisions. And how peoples preferences are different based on the gamble, as generally people tend to prefer the gamble with the higher probability. A theory behind this notion is Choice Intransitivity (Tversky, 1969). Choice Intransitivity has 3 dimensions, intellectual ability, emotional stability and social facility. And is the best way of choosing candidates as it violates the assumption of Utility Theory.

Lictenstein and Slovic, 1971 looked at explanations into why people are willing to pay more with the highest potential outcome. The main reason was that when people are considering these proposed gambles, they find it hard to weigh up the probabilities and outcomes, however when actual money is involved an actual outcome is expected and predicted. Looking at the way the questions are portrayed also has a factor when people make decisions, like framing as most people would go for the higher probability question. This also backed up by Prominence Hypothesis as whatever question is more prominent will affect a person’s answer.

I am not a gambler, however given the example of 7/36 chance of winning £9 and a 7/36 chance of winning £9, but a 29/36 chance of losing 50p. I would definitely choose the second choice. However it has been proven that the more items to consider the more the more analytical people are.

Overall my own personal preferences when making decisions would depend on the strategy selection determined by personal and task factors.

Rational Choice and the Framing of Decisions:

This week was based on the article by Kahneman and Tversky (1986) Rational Choice and the Framing of Decisions. Which is a modern theory of decision making under risk  and uncertainty and also shows alternative descriptions of a decision problem often give rise to different preferences, contrary to the principle of invariance that underlies the rational theory of choice. The article introduced the idea of framing which is basically the same option just presented in different ways, and how this affects and can change people’s decisions. Specifically individuals who make inconsistent choices that usually depend on whether a question is framed in a way that suggests a win or lose scenario. Within the article it also introduces Prospect theory, which describes decisions between alternatives that involve risk i.e. where the probabilities of outcomes are known. The model is descriptive , and it tries to model real-life choices, rather than optimal decisions. During the article it looked at the different outcomes of framing and how something is portrayed that will affect the outcome and a person’s decision. The article also demonstrated the 4 principles of utility theory and looked at the failures of invariance (which was one of the 4 principles of utility theory). The conclusion from this was that violations of invariance are caused by framing effects i.e survival and death. Overall I found the article portrayed a good sense of rational choice in decision making. I felt that the example for the failures of invariance on lung cancer and different examples of treatments showed an accurate idea of how it is the way in which things are portrayed that can affect people’s decisions.

Decision Making!!!!

Decision Making Under Risk and Uncertainty!

This week’s topic was on decision making under risk and uncertainty.  In class we had to find our personal point of indifference in making a decision between a choice that is certain and a choice that would be taking a risk. I always thought of myself as someone who would take risks, however I found that in class I went for the certain choice. We looked at theories and the Allais Paradox was the one I found most interesting where you have a choice between A and B. A£I,000,000 for sure or B. 10% Chance of getting £5,000,000 and 89% chance of getting £1,000,000 and 1% chance of getting £0. I chose A for certain.

I believe that decision making is evident in nearly everything we do. From the everyday to the consequential, our lives are governed from the decisions that we take. Therefore it is difficult to understand the factors about how we make decisions. When understanding decisions you need to understand and be aware of how various factors may have had an influence on past decisions, and so that we may be able to improve upon future decisions.

Because decision making is so central to our lives, it is not surprising that it receives research

attention from a wide range of disciplines: cognitive psychology, economics, political science, marketing, social psychology, engineering, philosophy, and more. I therefore have come to the conclusion that I myself tend not to take too many risks when making a decision.

Bailing and Jailing the Fast and Frugal way!!

This we in our groups we had to discuss the article ‘Bailing and Jailing the Fast and Frugal way’ Dhami and Ayton (2001). I believed that the main focus of the article was about how magistrates make decisions about whether to realise defendants on bail based on predictions on their previous crimes and whether they have re offended when out. Decisions to bail upon adjourning a case have major consequences for both defendants and society. Some of the facts from this article are that 98% of criminal cases are dealt with from start to finish by magistrates. Also that magistrate’s decide whether to make punitive or non-punitive decisions on whether a case is adjourned for subsequent trial or appeal.

The article was split into two sections the first half was on reasons that affect accuracy of judgements and the second half was about the models. Basically some of the things that can affect magistrate’s decision making is sometimes having a lack of information on the defendant which could results in an inaccurate decision. Also all magistrates decisions are also always under time pressure and are therefore pushed to rush their decisions so as to make them quickly. Rushing the decision can therefore have an impact on decision making. Another is the quality of info as magistrates do not know how useful different information is in predicting what the defendant will do when bailed. Also there are no statutory rules for the procedure for bail hearings in magistrate’s court. Looking at all these reasons made me think that magistrates can’t always make the right decision and how much this can have an impact on a person’s life. It shows me the importance of having the right information when making such an important decision.

The other half of the article identified the different process models such as the due- process model, which aims to reduce crime, whilst minimizing the number of innocent people wrongly convicted.  There was also Judgement analysis which is an ability model to describe and predict individual’s judgement data is limited by their consistency in making decisions because inconsistent individual will be hard to predict. Other models were the Conjunctive/ Disjunctive/ Former models where all cue values must pass a specific threshold before a judgement is made. Lastly were the Fast and Frugal models that are simple process models that do not search through all available info, do not integrate all relevant info and base their decision on only one cue. They are accurate and the evidence for the F& F models are as good as compensatory integration models at describing human judgements.

Overall the results from the article showed that magistrates showed inconsistency in their bail decisions and that they are influenced by defendant and crime control related cues. Looking at matching heuristics backs up compensatory models. The fast and frugal way model portrays a picture of bail decision making that conflict with the ideal practice as defined by due process model of justice. I believe that given that not all information presented to magistrates is accurate and that it is always hard to predict human behaviour, and therefore hard to predict whether a defendant will re- offend, makes decision making very complicated and often inaccurate.