Key+Findings+Within+This+Branch

__KEY FINDINGS﻿ __

**The majority of early research tended to ignore optimal behavior on decision making. During a ten year span of research (from 1972-1982) review of available literature on decision making would lead one to believe human judgment and reasoning is inadequate (Beach, 1984). Poor performance seemed impression amongst researchers. Much of the findings focused on the value of researching reasoning errors (Kahneman & Tversky, 1982) and failed to recognize the importance of studying good judgment (Christenensen-Szalanski,1978).**

**L.J. Cohen suggests this trend depended greatly on how the experimenter decided to interpret the data and that human decision making is in fact adequate and at times optimal (1984). Although the combined findings of this era point to decision-making as veering from optimality it cannot be concluded it is all together ineffective. Herbert Simon’s bound rationality suggests that most humans make good decisions most of the time with the information available (452).**



**Decision making consists of a pathway of consciously choosing** **from a range of possible behaviors. It is hard to narrowly define,** **but it is roughly defined as “generating, evaluating, and selecting** **among a set of relevant choices”** **(Markman, Medin & Ross, 2005).** = ﻿ = = = = = = =

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**﻿Many aspects of cognitive psychology merge with decision making, making it difficult to narrow to a specific definition,** **such as problem solving. However in reality all aspects—language, perception, learning, and memory—deal with decision** **making.**

** In this section of decision making, theories and models have been developed which contributed to this sub-branch of Cognitive Psychology. Ultimately, these theories present us with how complex and intricate the **** human mind takes role in making decisions. **



= = **__Markov Models__** ** These Models are useful when ** ** a decision problem involves risk that is continuous over time, when the timing of events is important, and when important event may happen more than once. These models are used in the medical setting of decision making (Beck & Sonnenberg, 1993). **

** However, According to Dawes and Hastie, the rational model of decision making can be understood by the concepts of irrationality. The law of contradiction can best describe irrational. It states that the process to reason may often lead to the same conclusions that can negate one another, and thus are seen as irrational. Therefore, it can be concluded that most people may not follow rational thought because of transivity, which is a thought strategy that follows a sequence of “if A is better than B, and B to C then one would naturally choose A to C” (Markman, Medin & Ross, 2005). **

**__Decision Field Theory__** **This is a crucial cognitive approach to human decision making it is a model that explains how people make the decisions opposed to the analytical approach that stipulates what people should do; published Jerome R. Busemeyer and James T. Townsend. The theory heavily regards to factors of uncertainty, decisions under pressure, and transformation of choices over time. This finding branches to neuroscience** **(Busemeyer & Diederich, 2000).**



**__Expected Utility Theory__** **According to von Neumann and Morgenstern (1944) “ Expexcted Utility Theory states that the decision maker chooses between risky or uncertain prospects by comparing their expected utility values, ie., the weighted sums attained by adding****the** **utility** **values of outcomes** **multiplied by their respective** **probabilities** **(Mongin, 1997).**



 **How should options <span style="background: white; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal;">be evaluated when making a choice? This is where the expected value theory developed, which derives from an economic perspective. It is where people organize the value of a range of choices and make the selection based on the highest and most beneficial value. However, one’s behavior contradicts this theory because one is more likely to contradict rationality and choose options for what the outcome can do for them. **<span style="background: none transparent scroll repeat 0% 0%; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt;"> **(Markman, Medin & Ross, 2005).** <span style="background: white; display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; text-align: center;">** The Expected Utility Theory is very similar to the Expected Value Theory with the exception that it directly recognizes that the value of the result will be influenced by the personal goals (Markman,Medin & Ross, 2005). **

<span style="color: #00ff00; display: block; font-family: Impact,Charcoal,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;">**__Regret Theory__** <span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; text-align: center;">**This suggests that we overweight anticipated feelings of regret when the difference between outcomes is large. An observation is made by Looms in an experiment drawing ticket numbers to win money. The difference between two outcomes that have a larger difference than another two set of outcomes anticipates the feeling of regret because what could potentially be lost has a greater effect (Markman, Medin & Ross, 2005).**

<span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;"> <span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;"> <span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;"> <span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;"><span style="color: #00ff00; font-family: Impact,Charcoal,sans-serif; font-size: 120%;">**__Framing effect__** <span style="display: block; font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 120%; line-height: normal; margin-bottom: 0pt; text-align: center;">
 * There** **are inconsistencies** **in decision making inevitably where “there is the same information presented in different forms can lead to different decisions” (Markman, Medin & Ross, 2005).**

__References__ Christensen-Szalanski, J. J., & Beach, L.J.Busemeyer,. (1984, January). //The Citation Bias: Fad and Fashion in Judgement and Decision Literature//. Retrieved from [|http://psy2.ucsd.edu/~mckenzie/Christensen-Szalanski%26Beach1984AmPsychologist.pdf]

Kahneman, D., & Tversky, A. (1982). On the study of statistical intuitions. //Cognition//, 11, 123-141.

Christcnsen-Szalanski, J. J. J. (1978). Problem solving strategies: A selection mechanism, some implications, and some data. //Organizational Behavior and Human Performance//, 22, 307-323.

Cohen, L. J. (1981). Can human irrationality be experimentally demonstrated? //The Behavioral and Brain Sciences//, 4, 317-331

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