Judgments and Decisions
Psych 253
Professor Jon Baron baron@psych.upenn.edu
Office: C7 Solomon
Office Hours: TBA and by appt
Professor Barb Mellers mellers@wharton.upenn.edu
Office C1 Solomon
Office Hours: Thursdays 1:30 to 3:00 pm and by appt
The syllabus is on Jon Baron’s webpage.
Teaching Assistants
Ann Marie Roepke aroepke@psych.upenn.edu
• Office: 3701 Market Street, suite 203 (second
floor, Positive Psychology Center)
• Office hours: Wed 3:30-5:00
Justin Landy landyj@psych.upenn.edu
• Office: C16 Solomon
• Office hours: TBA
Assignments and Grading
Reading, thinking, and class attendance
influence your grades on everything else…
• 30% Midterm: Oct 5th 2 – 3:30 pm
• 30% Homework Assignments and Discussion
Paper
• 40% Final Exam: Dec 16th 6 – 8 pm
Goal
• To teach you some principles of good
judgment and decision making, to show you
where people go astray, to suggest ways to
avoid errors and biases, and to explore with
you some implications of the theories and
findings for real world problems.
Normative Decision Making
How people should make decisions when
they want to be rational, obey the rules of
probability and statistics, be logical, and be
consistent
Descriptive Decision Making
How people actually do make decisions within
the limits of their cognitive capacities
Prescriptive Decision Making
The best advice we can provide others who
want to make rational decisions given our
understanding of actual human decision
making.
Topics in this Course
Multi-attribute Decisions
Probability
Value of Information
Irrational Belief Persistence
Money and Happiness
Reference-Dependent Choice
Intertemporal Choice
Utilitarianism
Negotiations
Voting
Linear Models of Judgment
Decision Analysis
Hypothesis Testing
Logic
Subjective Well-Being
Utility
Risk
Moral thinking
Perceptions of Fairness
Social Dilemmas
Expert Decision Makers
Tools for Debiasing
What is a decision?
What are the components of a decision?
1. Alternatives (actions, acts, options)
2. States of nature
3. Outcomes (consequences)
4. Utilities (psychological value of outcomes)
5. Goals (rules for deciding how to decide)
Types of Decisions
Decisions Under Certainty (Riskless Decisions): One state
of nature associated with an option (probability = 1)
Decisions Under Risk: Multiple states of nature with
known probabilities associated with an option
Decisions Under Uncertainty: Multiple states of nature
with unknown probabilities associated with an option
Decisions Under Conflict: Outcomes depend on the choice
of an opponent (rather than states of nature)
• What is it that makes decision making so hard?
• What is a good decision?
• How would you KNOW if a decision you made
was a good decision?
• Decisions ≠ Outcomes (Decisions are what we
control. Outcomes are what happen.)
• Good decisions can have bad outcomes, and
good outcomes can arise from bad decisions.
In most courses on judgment and decision
making, you will learn that:
Whether a decision is good or bad depends on
how you made it, not what happened.
Criteria for Evaluating Decisions
Coherence = consistency with principles of logic,
probability, and rational principles.
Correspondence = accuracy (similarity between
predictions and real world)
With coherence, the focus is on process.
With correspondence, the focus is on outcome.
Which cells are most conducive to learning?
Process
Good
Good
Outcome
Bad
Bad
Example of a Coherence (Process) Study
Students were given pairs of hypothetical
marriage partners and judged which of the
two potential partners they preferred.
Each partner was described in terms of his
or her intelligence, looks, and wealth.
• X is very intelligent, plain looking, and well off.
• Y is intelligent, very good looking and poor.
• Y is intelligent, very good looking and poor.
• Z is fairly intelligent, good looking, and rich.
• Z is fairly intelligent, good looking, and rich.
• X is very intelligent, plain looking, and well off.
Example of Coherence (Process) Study
Linda is 31 years old, single, outspoken, and very
bright. She majored in philosophy. As a
student, she was deeply concerned with issues
of discrimination and social justice, and also
participated in anti-nuclear demonstrations.
Which is more probable?
• Linda is a bank teller.
• Linda is a bank teller and is active in the
feminist movement.
Example of a Correspondence (Outcome) Study
I will ask you to think about 10 questions. Your goal is
not to get the exact answer, but rather to give a high
and low estimate such that you are 90% sure that the
correct answer falls within that range. You can go as
high or low as you like. The challenge is to select a
range that is neither too narrow nor too wide. If you
succeed, you will have 9 correct answers and 1 error.
That means you are correct 90% of the time.
1. Weight of an empty Airbus A240-600 (in kilograms or tons)
Low = ________
High = ________
2.Year that John Steinbeck won the Nobel Prize for literature
Low = ________
High = ________
3. Distance (in kilometers or miles) from the Earth to the Moon
Low =________
High =________
4. Air distance (in kilometers or miles) from Madrid to Baghdad
Low =________
High = ________
5. Year the construction of the Roman Coliseum was completed
Low =________
High = ________
6. Year that Magellan's crew completed the first naval
circumnavigation of the globe
Low =________
High = ________
7. Height (in meters or feet) of the Aswan High Dam
Low = ________
High = ________
8. Year that Mohandas K. Gandhi was born
Low = ________
High = ________
9. Surface (in square kilometers or miles) of the Mediterranean Sea
Low = ________
High = ________
10. Gestation period of the great blue whale in days
Low = ________
High = ________