Judgment:

- People draw conclusions from the evidence they encounter; the evidence is sometimes
loosely defined.

Frequency estimate:

- Many judgements require it.

Attribute substitution:

- Make judgments rely on easily assessed information.

Heuristics:

- Efficient strategies that usually lead to the correct answer.

Availability heuristic:

- The ease with which examples come to mind is a proxy for frequency or likelihood;
heuristics can result in errors; impact judgment.

Representative heuristic:

- Assumption that resemblance to the prototype reflects probability; you usually assume a
lot when you learn someone’s category.

Covariation:

- X and Y covary if the presence of X can be predicted by the presence of Y; often

incorrectly assumed, and causal claims are improperly made.

Confirmation bias:

- Tendency to be more alert to evidence that confirms one’s beliefs than to evidence that
challenges them.

Base-rate information:
 - Information about how frequently something generally occurs; when diagnostic
information is given, people neglect the base rate.

Diagnostic information:

- Does an individual case belong to a category? Dominate the decision-making depends

on category…

Conjunction fallacy:

- The false assumption that a combination of conditions is more likely than either
condition by itself.

Dual-process model:

Type 1: fast and automatic thinking; reliance on heuristics.

Type 2: slower, effortful thinking; more likely to be correct.

- Emphasizing randomness encourages type 1.

- Education encourages type 2.

Induction reasoning:

- Process through which you forecast about new cases based on observed cases.

Deduction reasoning:

- Process through which you start with “given” and ask what follows from these premises.

Deductive reasoning

Confirmation bias:

- A greater sensitivity to confirming evidence and a tendency to neglect disconfirming

evidence; only to confirm the rules they were proposing.

Disconfirming evidence:

- Information inconsistent with one’s belief’s is often scrutinized for flaws.

Belief perseverance:

- Tendency to maintain a belief even when given undeniable disconfirming evidence.

Logic:

- Confirmation bias suggests a failure to be logical.

Categorical syllogisms:

- Logical arguments containing 2 premises and a conclusion.

Conditional statement:

- If X then Y.

Syllogisms

Belief bias:

- People’s assessment of a syllogism’s conclusion is affected by how consistent the

conclusion is with their beliefs; conclusion is not logical from the two premises.

The principle of utility maximization:

- We should be choosing the option with the greatest expected value (balance of costs
and benefits)

Utility:

- The value that you place on a particular outcome.

Risk:

- Probability of a negative outcome.

Prospect theory:

- When evaluating gains, people are risk aversive.

- When faced with a sure loss, people become risk-seeking.
Framing:

- Depending on how a problem is framed, decisions will widely differ.

Status quo bias:

- A preference for the current state of affairs.

Transaction costs:

- Time, effort, and resources needed for change.

Optimal defaults:

- Automatically place people into options that have the greatest benefit.

Endowment effect:

- Tendency to overvalue what one has in hand.

Sunk cost effect:

- Tendency to continue a task once investing time, energy and resources.

Emotional decisions

- Somatic markers: gut feeling; used as an indicator of risk.

- Affective forecasting: predict our future emotions.

Problem-solving:

- The effort directed toward finding ways to obtain one’s goals.

Problems can be:

- Well or ill defined.

- Routine or nonroutine.

Problem space:
 - The set of all states that can be reached in solving the problem; need strategies to
reduce the space.

Hill-climbing strategy:

- At each step in solving a problem, choose the option that moves you in the direction of
your goal.

Means-end analysis:

- What means do I have to make my current state more like my goal state?

Drawing the problem out

- More effective.

Problem-solving and experience:

- We use our past experiences. (Analogical reasoning)

Problem-solving via

- Analogy: spontaneously engaging in analogical reasoning is actually quite rare; problem-

solving can be improved by encouraging people to focus on the deep structure at initial
learning of the problem.
- Subgoals: problems can be broken up into subproblems.

Functional fixedness:

- Tendency to be rigid in thinking about an object’s function.

Problem-solving set

- Collection of beliefs and assumptions a person makes about a problem.

Einstellung:

- A problem solver’s beliefs, habits, and preferred strategies.

Creativity in problem-solving:
 - Some people are flexible in approaches to problems and others rely on routine.

Shared “prerequisites”:

1. Great knowledge and skill in the domain.

2. Certain personality traits. (willing to take risks, and ignore criticism)
3. Motivated by the pleasure of work.
4. In the right place at the right time.

Creative thought proceeds in four stages:

1. Preparation: information gathering.

2. Incubation: conscious break.
3. Illumination: insight emerges.
4. Verification: confirmation that the new idea leads to a solution.

Creative people often are:

1. Experts
2. Willing to take risks.
3. Motivated

Probably good at:

1. Convergent thinking.
2. Divergent thinking.
3. Forward flow.

Convergent thinking:

- An ability to spot ways in which seemingly distinct ideas might be interconnected.

Divergent thinking:

- An ability to move one’s thoughts in novel, unanticipated directions.

Forward flow:
- How much one’s current thinking breaks away from past thoughts.