Decision psychology

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The decision psychology deals with the cognitive processes that shape the thinking , the learning and the decisions of the people relate to.

The normative decision theory describes humans as a rationally thinking decision maker. A decision is generally considered to be rational if the chosen alternative appears to be better than all other alternatives in order to achieve the desired goals (Baron, 2000). However, research in the field of decision psychology shows that people by no means only behave in terms of cost-benefit considerations . Human decision-making behavior is not based on the “ideal of a completely rational benefit-maximizing Homo Oeconomicus ” (Gleißner and Romeike, 2012, p. 43). If the decisions are correct, there is often no detailed weighing of the respective advantages and disadvantages.

Therefore, many decisions can be classified as not rational ( Shafir and LeBoeuf, 2002) and many models of rationality do not realistically reflect the actual decision-making behavior. Thus, a person's decision-making behavior can be understood as a process in which rationality only takes place to a limited extent.

One example is the sunk costs effect . The "sunk-cost effect" is understood to mean that people tend to hold onto alternative courses of action in which more money or time has already been invested, even if there are clear indications that the alternative will not work (Gleißner, 2003 ; Arkes and Ayton, 1999). The “sunk cost effect” can be explained by the well-known descriptive prospect theory , which describes that objectively small probabilities are overestimated and objectively large probabilities are undervalued ( Kahneman and Tversky , 1979).

Normative decision theories - such as the Homo Oeconomicus model - systematically neglect the fact that all alternatives and their potential consequences are never available in the decision-making process.

The reasons are

  • a) that the use of further information is associated with considerable costs,
  • b) there are theoretically an infinite number of alternatives,
  • c) potential consequences of each alternative cannot be identified and
  • d) The probability of a consequence occurring cannot be estimated ( Gigerenzer , 2008; Gigerenzer et al., 1999).

Decision support

Since in many situations the probability with which a certain event will occur is not known, the decision maker has to estimate the probability of occurrence. Heuristics play an essential role in this decision-making process , but this means that information that could potentially contribute to the decision is often not taken into account. Accordingly, the objective is often not the best result, but rather a satisfactory result (“Satisficing Behavior”). In the following, the best-known heuristics that people use when estimating probabilities of occurrence are presented: the availability heuristic , the anchor heuristic and the representativeness heuristic . Under certain circumstances, heuristics can lead to dramatic misjudgments, which are discussed below.

Availability heuristic

Availability heuristic : In order to estimate the probability of an event, the frequency of occurrence must be determined. However, since this is often not immediately implementable for a person, decisive events have to be recalled from memory. This process usually leads to a bias, since events are not always cognitively available (Tversky and Kahneman, 1973).

Anchor heuristic

Anchor heuristic : In the judgment process, people are guided by a certain initial value, also known as the anchor. This is often not sufficiently adjusted in the further decision-making process, so that a final judgment is skewed towards the initial value (Tversky and Kahneman, 1974).

Representativity heuristic

The representativeness heuristic helps to assign certain individual cases to a higher-level category. However, people tend to neglect the distribution of certain traits in a mass, while paying more attention to individual traits (Kahneman and Tversky, 1973).

Criticism of such heuristics can be found, for example, in Dietrich Dörner (1989). In his model of ballistic decision-making behavior ("fire and forget"), Dörner describes that decisions are shot down as quickly as possible - like cannonballs. The effects of these decisions, like the flight of a cannonball, are neither controlled nor controlled. There is no questioning. This means that it is no longer checked whether the promised effects have actually occurred (Dörner, 1989).

Satisficing behavior

Under "Satisficing Behavior", Simon (1959) described that it is often not the best solution that is accepted, but a satisfactory one. The existing optimization potential is not exhausted until the current situation is no longer acceptable and an individual tolerance limit of the decision maker has been exceeded. It is only from this point onwards that new ways are considered which lead to an increase in utility or yield.

Summary

In summary, it can be stated that the goal of human action is aimed at the acquisition of positive emotions and not necessarily at abstract maximization of utility. Furthermore, individuals can only inadequately infer the future from the past because memories are systematically distorted. In addition, people need a stop rule that helps them break off an unusable decision-making process.

Web links

literature

  • H. Arkes, P. Ayton: The sunk cost and Concorde effects: Are humans less rational than lower animals? In: Psych. Bull. Vol. 125, 1999, pp. 591-600. (americandreamcoalition.org)
  • J. Baron: Thinking and deciding. Cambridge University Press, New York 2000, ISBN 0-521-65972-8 .
  • D. Dörner : The logic of failure. Strategic thinking in complex situations. Rowohlt, Reinbek 1989, ISBN 3-498-01260-6 .
  • G. Gigerenzer : Rationality for mortals: How people cope with uncertainty. Oxford University Press, New York 2008, ISBN 978-0-19-532898-1 .
  • G. Gigerenzer, PM Todd, ABC Research Group: Simple heuristics that make us smart. Oxford University Press, New York 1999, ISBN 0-19-514381-7 .
  • W. Gleißner: The psychology of business decisions. In: Business Psychology. Vol. 6, 2003, pp. 69-74. (werner-gleissner.de)
  • W. Gleißner, F. Romeike: Psychological aspects in risk management. In: Risk, Compliance, Audit. Vol. 6, 2012, pp. 43-46. (risknet.de)
  • D. Kahneman, A. Tversky: Prospect theory: An analysis of decision under risk. In: Econometrica. Vol. 47, 1979, pp. 263-291. (people.hss.caltech.edu)
  • E. Shafir , RA LeBoeuf: Rationality. In: Annual Review of Psychology. Vol. 53, 2002, pp. 491-517.
  • HA Simon: Theories of Decision-Making in Economics and Behavioral Science. In: The American Economic Review. Vol. 49, 1959, pp. 253-283. (pages.stern.nyu.edu)
  • A. Tversky , D. Kahneman : Availability: A heuristic for judging frequency and probability. In: Cognition. Vol. 5, 1973, pp. 207-232.
  • A. Tversky, D. Kahneman: Judgment under uncertainty: Heuristics and biases. In: Science. Vol. 185, 1974, pp. 1124-1131. (psiexp.ss.uci.edu)