Faculty
Laurel C. Austin

Course Coordinator
Laurel C. Austin

Open to all undergraduates

This course will provide students with a foundation in the area of judgment and decision making, an inter-disciplinary field that draws on insights from cognitive and social psychology, economics and statistics. Students will learn and apply a variety of theories related to decision making, especially focusing on how cognitive limitations affect how we make decisions. Students will learn ways to recognize limitations and make decision processes more effective. We will apply three types of theories: normative, meaning theories about how decisions ought to be made; descriptive, meaning theories that describe how people actually make decisions; and prescriptive, meaning theories about how to help people make better decisions.

The course will cover some basic probability and statistics; however, this will not require any particular mathematics background. Students will study descriptive theories of human inference and understanding of probabilistic information. We will examine widely observed limitations in human inference and learn how to use decision models to help overcome them. We will consider the implications for both individuals, groups, and public policy decision makers.

The course will be a mixture of lectures and case discussions. This class will be more enjoyable and a better learning experience for everyone if everyone is involved and contributing on a regular basis. Students are expected to come to class prepared, having read the materials assigned for the day prior to the start of class. Students are welcome to bring articles, newspaper articles, web-pages, etc., that are relevant to topics discussed during the semester.

Students will develop their ability to think logically and analytically about a decision situation, but will also understand and be able to recognize common cognitive limitations in how people make decisions. They will be able to use simple probability information in analysing a decision situation, and will be able to apply that to their own decision making.

At the end of the course, the student must be able to:

· Individual 4 hour written exam – closed book; calculators are allowed

· The make-up and re-examination regulations are the same as for the ordinary exam unless the number of registred candidates for the make-up examination or re-examination warrants that an oral exam is more appropriate.

The Psychology of Judgment and Decision Making by Scott Plous, McGraw Hill, 1993

Baron, J. 2008. Thinking and Deciding, Fourth Edition. Cambridge: Cambridge University Press, Chapter 1

Dawes, R. (1988). Appendix A1 in Rational Choice in an Uncertain World, 275-291. Fort Worth: Harcourt Brace Jovanovich

Edmondson, Amy C., and Laura Feldman. "Group Process in the Challenger Launch Decision (A)." Harvard Business School Case 603-068.

Fischhoff, B., Nadaï, and I. Fischhoff (2001). Investing in Frankenfirms.

Krishnamurti, T., Eggers, S., Fischhoff, B. (2008). The impact of over-the-counter availability of ‘Plan B’ on teens’ contraceptive decision making. Social Science in Medicine. 67:619-627.

Patterson, K., (2002, May 5). What doctors don’t know (almost everything). New York Times Magazine

Pope, T. (2008, August 5). Panel urges end to prostate screening at age 75. New York Times.

Roberts M. and Sonnenberg, F. (2003). Ch 2 p 20-27 in Decision Making in Health Care: Theory, Psychology and Applications, G. Chapman (ed), Cambridge University Press

Simon, H. (1979). Rational Decision Making in Business Organizations. The American Economic Review, v 69, No4 (Sept), 493-513.

Thaler, R. (1985). Mental accounting and consumer choice. Marketing Science, 4, 199-214.

Tversky A., and Kahneman, D (1971). Belief in the law of small numbers. Psychological Bulletin, 76:2, 105-110.

Tversky A., and Kahneman, D (1981). The framing of decisions and the psychology of choice. Science, 211, 453-458.