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Rationality and Emotion in Decision Making: by Fred Phillips, Stolen From Based On..
Rationality and Emotion in Decision Making: by Fred Phillips, Stolen From Based On..
in Decision Making
by Fred Phillips,
Stolen from Based on...
Based on material from:
• How We Decide, by Jonah Lehrer
We seem to make
Case 2: Defense
William James
The
http://www.youtube.com/watch?v=1wup_K2WN0I
“Before you implement a
decision, check whether
your calculation and your
belly agree. If they don’t,
find out why. Change the
decision if necessary until
the two agree.” - George
Kozmetsky
Exercise: Discuss a
situation in which you used
- or tried to use, or failed
to use - both rational and
“gut” methods to arrive at
an important decision.
Daniel Kahneman
• 2002 Nobel Laureate in Economics
• Like William James, believes we have 2
mental ‘systems’:
– System 1, for near-instinctual decisions;
– System 2, for higher logic.
• We make most decisions based on emotion,
but even the rational parts:
– Depend on our mood;
– Are often flawed,
– No matter how smart we are.
Kahneman’s examples
• Seeing frequent advertising leads to
a more favorable opinion of the
product.
• We need simplicity, so we jump to
false (but consistent) conclusions.
• “People, including scientists, often
search for information that confirms
their own beliefs.”
Conclusions from Kahneman
1. Before implementing, revisit a decision on
another day or another part of the day,
to correct for mood changes.
2. Devise your own ad hoc strategies: DK let
students’ answers to Q1 influence his
grading of Q2. Now he grades all Q1s
before going back to grade all students’
Q2s, etc.
Exercise
• Consider choosing a restaurant to
take guests to dinner.
• What parts of the decision making
process are rational? What parts are
emotional?
• How would your answer change if it
were a very important decision, for
example, for your wedding or your
daughter’s wedding?
When do we need the
rational side?
• Organizationally, or for policy
– To explain - or justify! - a decision
• Psychologically
– Loss aversion
– Random events
– Discounting
Loss Aversion
• Doctors are asked to choose, in 2 trials:
– 1st trial: Alternative A is “60% chance of saving
patient.”
– 2nd trial: The same alternative is called “40%
chance patient dies.”
– More doctors choose alternative A in Trial 1
than in Trial 2, even tho choices are identical.
• We hate losing more than we want winning.
• People with brain lesions that inhibit
emotion do not display loss aversion
behavior. “Normal” people do, consistently.
Random events
• The emotional brain looks for patterns.
• Casino games are random (except that e.g.
slot machines pay 10% to the house). That
is, no pattern.
• Thus, emotional brain does not want to stop
playing.
• People with brain lesions inhibiting rational
thought easily become addicted to
gambling.
Discounting over time, space, and
scope. The emotional brain...
• ... values short-term payoff more than we
value a greater long-term benefit.
• ... is more concerned with our own
neighborhood than with events in distant
countries.
• ... cares more for what happens to
individuals than to what happens to masses.
• Example: Genocide & starvation in South
Sudan vs. abuse of one child in Oprah
Winfrey’s school (2010).
Metacognition and
“executive control”
• How can we balance the effects of
emotion vs. rationality?
• The answer is self-examination.
– We can be aware of our own emotions.
– Ask, “Why do I feel this way?”
• Thus, Kozmetsky and Kahneman gave
us good advice for evaluating our
decisions.
The pre-frontal cortex is
home to rationality and to
creativity.
• Other parts of the brain can do only one
thing.
• But the PFC is versatile,
– “does whatever you program it to do.”
– has connections to all other parts of the brain.
• Beware of fMRI results, though
– Attempts to tie specific brain activity to
specific behaviors are not yet reliable.
What inhibits PFC function?
• Placebo effect
• Distraction
• Tiredness
• Susceptibility to logical fallacies
• Stress
Signs of Stress
Headaches, Sleepless- Negativity, Feeling Loss of
etc. ness cynicism pressured, humor
over-
whelmed