Cognitive Processes Class Exercises - Week 8 - Online

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49001 JDM Week 8 Class Exercises - Online
Introduction
This week’s class is all about patterns.
Patterns? Yes patterns, because patterns are the underlying cognitive mechanism on
which almost all human perception is based. From the moment of birth, humans are
biologically disposed to seek out patterns in everything we perceive, across all our
senses.
The image above shows some patterns designed for parents to show to their newborn
babies. Patterns both distract and stimulate babies as young as just one day after birth,
but they also exhaust them. After a short period of intense concentration (and quiet for
the parents!), babies become mentally exhausted and cry.
The pattern-matching basis of human cognition is mostly good for us and has been a
key part of human evolution. How we “see” the world and the patterns within it greatly
affects our judgment, as if every human is seeing the world through a slightly different
lens. This is the essence of the Brunswik’s lens model discussed in this week’s
readings.
Occasionally though, it all goes wrong: we see patterns where there are none, or we
assume some patterns are meaningful when they are just the result of a random
correlation, or part of a larger pattern that we have not noticed. These ‘patterning
errors’, or cognitive biases, result in distortions in our judgment, sometimes for the
better, sometimes for the worse.
This week we will explore the cues and influences resulting from humans’ obsession
with finding patterns in things, the quasi-rational inferences that are made from them,
and the types of cognitive biases that can affect engineering decisions.
49001 Judgment & Decision Making Autumn 2020

Copyright © 2020 University of Technology Sydney
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Exercise 1: Nuclear power in Germany
Do you remember the Fukushima Daiichi nuclear plant case study from our Week 2
class?
The 2011 disaster greatly influenced opinions about nuclear power in many parts of the
world. Just a few months after the Fukushima disaster, the Chancellor of Germany,
Angela Merkel, announced that Germany would immediately close a majority of its
nuclear power plants and would completely close all of them by 2022.
Prior to German unification in 1990, West German public opinion was strongly anti-
nuclear, the country had no nuclear power, and the energy grid was powered mostly by
coal and gas. In East Germany however, a network of aging Soviet-built nuclear power
plants provided most of the grid power, and the new unified Germany inherited this
mixed legacy. After unification, around 25% of Germany’s total energy generation came
from the nuclear plants.
Shutting down the nuclear power plants caused an immediate energy shortage in
Germany, affecting industrial production and pushing up prices. Chancellor Merkel
insisted that the decision was still correct, as it would better position Germany in the
long-term for a future with alternative and renewable energy sources. However in the
short term, it had the following effects:
• Energy price increases were not popular amongst the German people
• Air pollution increased in parts of the country as coal production was expanded
• Germany became more reliant on imports of gas from Russia, the control of
which Russia had previously used to extract trade concessions from Germany.
• Germany’s previous chancellor, Gerhard Schröder, expanded his personal
business dealings with Russian gas companies and started campaigning for
changes to German policy in favour of relying more heavily on Russian gas.
Questions
Answer the following questions by completing the provided Brunswik’s lens template.
Question 1:
Thinking about Brunswik’s lens, what ‘problematic situation’ did Chancellor Merkel face?
Question 2:
What ‘cues’ were derived from the facts available to her at the time?
Question 3:
What different ‘cues’ might Gerhard Schröder have derived from the same facts?

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Question 4: Using a combination of perception and quasi-rational inference, what

different cognition results do you think Merkel and Schröder might have reached?
To assist, two background articles are also provided at the end of this document.

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Exercise 2: Evaluating cognitive processes
“The Bangaloo Maintenance Bid”
Jack was in the last stages of putting together a bid for road maintenance in the far west
of NSW centred on the Roads Department’s office at Bangaloo. While driving back from
Bangaloo, Jack was mulling over the decisions he had made was pleased. The
company he worked for was well placed for this work. The Bangaloo office always used
NSW-based consultants – they were closer and generally “spoke their language” with
regard to local needs and conditions (A).
Jack’s company was using another company, CFC Consultants, as its major sub-
consultant. Jack liked the work of CFC Consultants – it was presented clearly, with lots
of diagrams and not too much unnecessary verbiage (B), useless statistics (C), or
negative messages (D). They always gave clear, practical alternatives for the decision-
maker (E). CFC had produced a dubious report a couple of years ago but Jack had
complained loudly and the next report was a distinct improvement.
The methodology they were using was based on the Queensland office’s successful
1982 project (G). He had been able to get bags of useful information on how that
project had developed from now retired project manager (H).
Staffing arrangements were well advanced. Bill was to be the project manager. Jack
knew from previous experience that Bill would cope despite his unfamiliarity with the
work (I). They were also likely bidding for another similar job in southern NSW. Both
proposals seemed likely to succeed and Jack had proceeded to put on more contract
staff in anticipation (J). Despite Bill’s doubts, Jack was confident that they would win
both jobs (K). After all, he had put together the firm’s most successful pasty bid (L).
Besides, this type of job suited them in that it conformed well with their aspirations for
the firm (M).
The work was not too different from that done previously by the Queensland office but
because of the remoteness Jack had added 10% to the price of the new bid (N).
Nevertheless, based on his drive over the road to Bangaloo, Jack decided that he may
have overestimated the cost of doing the job (O).
Driving had proved useful but Jack was feeling the pressure of his personal and
corporate deadlines. Jack was anxious to get back in time for his wife’s birthday party
(P) and the boss always liked a well-written draft to review over the weekend (Q).
Perhaps he shouldn’t have driven but the publicity about air crashes had been
unfortunate and despite the time required Jack’s wife persuaded him to drive to
Bangaloo rather than fly (R). He hated the buffeting of these small planes (S) and

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agreed with relief – despite Bill’s joshing that the roads were a lot more dangerous (T)
and that it was unlikely that another crash would occur so soon (U). Two-engined
planes were safe anyway, he said! (V)
The trip had been worth it despite Jack’s disquiet when he first met the Roads
Department’s project engineer. The person who sounded so sensible on the phone had
a long, messy “hippie” beard! (W) The trip had produced quite a lot of new data and
Jack was tempted to cut his price just a little (X). The good state of the roads seen by
his colleague Henry in the nearby Bourke area confirmed his views (Y). He had to trust
the instincts that had served him so well in the past (Z).
Question:
Given your understanding of the Influences on Quasi-rational Judgment from Chapter 7

(pages 112-115), and with reference to your previous readings of the Constraints
section of Chapter 4 (pages 65-66), consider the following:
It is possible that Jack’s judgment has been affected by a number of biases. The
thoughts marked by a letter (A-Z) may have been influenced.
For each letter (A-Z), list the possible biases involved.

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Appendices:
1. Deutsche Welle article, 15 March 2011: ‘Merkel shuts down seven nuclear
reactors’.
2. Washington Post article, 13 August 2017: ‘He used to rule Germany. Now, he
oversees Russian energy companies and lashes out at the U.S.’.

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Merkel shuts down seven nuclear reactors | Germany| News and in-depth reporting from Berlin and beyond | DW | 15.03.2011 11/5/20, 9:46 am
TOP STORIES / GERMANY
Advertisement
GERMANY
Merkel shuts down seven nuclear reactors

Chancellor Angela Merkel announced Tuesday that her government is taking the seven oldest German nuclear power plants
off the grid, at least temporarily, following a meeting with five state premiers.
Chancellor Angela Merkel announced Tuesday that seven of Germany's 17 nuclear power stations would
be shut down, at least until the end of a three-month moratorium on the extension of the lifespans of
Germany's nuclear stations.
The decision was made as a direct result of the nuclear disaster currently unfolding at the Fukushima
nuclear power plant in Japan.
The shutdown affects those power stations that were

Merkel's move is a U-turn in her put into operation before the end of 1980. In addition,
energy policy all of Germany's nuclear power stations would
undergo new safety tests. Merkel promised that by the
end of the moratorium, due to run out by June 15, "all safety questions would be
answered."
"We want to use the time of the moratorium to accelerate the energy conversion [towards
renewable sources]," Merkel said at the press conference. "That means we will look at the
The mood in Germany is swinging against nuclear power
infrastructure of that conversion, analyze it, and see where there are opportunities to
accelerate it. We will also look again at how we can provide more support to renewable
energy."
Apart from the chancellor, the meeting was attended by Environment Minister Norbert Röttgen, Economics Minister Rainer Brüderle, as well
as the state premiers of the five states where nuclear power stations are located: Baden-Württemberg, Schleswig-Holstein, Hesse, Lower
Saxony and Bavaria.
Brüderle said that while the move could result in price-hikes on electricity bills, there would be no shortfall in the energy supply. Claudia
Kemfert, energy spokeswoman at the German Institute for Economic Research (DIW), told Reuters news agency that this depended on how
long the power plants would be off the grid. "In the short term, you can remove up to four or five nuclear reactors from the grid," she said.
Election motives
The political opposition views Merkel's moratorium as an election campaign maneuver. It means that no decision will be made on the future
of nuclear power in Germany until after five crucial state elections: in Saxony-Anhalt, on March 20, in Baden-Württemberg, Rhineland-
https://www.dw.com/en/merkel-shuts-down-seven-nuclear-reactors/a-14912184 Page 1 of 3
Merkel shuts down seven nuclear reactors | Germany| News and in-depth reporting from Berlin and beyond | DW | 15.03.2011 11/5/20, 9:46 am
Palatinate and Hesse, all on March 27, and in Bremen on May 22.
Sigmar Gabriel, head of the Social Democratic Party (SPD) was withering on Merkel's
new plan: "She claimed then that all safety concerns in German nuclear power stations
had been cleared up, and she claimed we needed nuclear power in Germany. Now we
know that none of that was true."
"Suddenly seven nuclear power stations can be shut down without any problem
ensuring supply," Gabriel continued. "And suddenly they're not so safe. It would have
been more appropriate to check safety before you extend lifespans."
Both Biblis power stations in Hesse are to shut down There has been particular attention paid to the Neckarwestheim power plant in Baden-
immediately Württemberg, focus of a 60,000-strong demonstration at the weekend. Baden-
Württemberg Premier Stefan Mappus, considered a supporter of nuclear power,
announced that the older of the two reactors at Neckarwestheim, which went into operation in 1976, would be shut down permanently.
The effect of Japan's unfolding nuclear catastrophe on Germans could not be clearer. After the protests in Baden-Württemberg on Saturday,
an estimated 110,000 people demonstrated in 450 German towns on Monday against the extension of nuclear power.
Opinion polls suggest that up to 80 percent of Germans are now against Merkel's decision to extend nuclear power, while 72 percent said
Germany's seven oldest reactors needed to be shut down immediately.
The seven reactors to be shut down immediately are Neckarwestheim 1, Philippsburg 1 (in Baden-Württemberg), Biblis A und B (Hesse), Isar
1 (Bavaria), Unterweser (Lower Saxony) and Brunsbüttel (Schleswig-Holstein).
In addition to Neckarwestheim 1, the Isar and Brünsbüttel reactors are likely to remain closed permanently. An eighth reactor, Krümmel
(Schleswig-Holstein), which is currently closed after breakdowns, will probably never be reconnected.
Germany's nuclear power stations currently provide around 23 percent of the country's electricity.
Author: Ben Knight (Reuters, dpa)

Editor: Michael Lawton
DW RECOMMENDS
European stocks plummet amid nuclear fears

European shares opened sharply down on Tuesday after stocks in Tokyo plummeted more than 10 percent amid signs that Japan's nuclear crisis is
intensifying. (15.03.2011)
Too hot to handle? EU meets to examine nuclear energy safety

Nuclear power policy varies widely across the EU. But Japan's crisis at multiple reactors has reinvigorated anti-nuclear states and led the bloc to consider
closer energy coordination on the continent. (15.03.2011)
Opinion: German government discovers the risks of nuclear power

The Japanese nuclear crisis has spread to Germany where the government has declared a moratorium on extending the lifespans of nuclear power plants.
Deutsche Welle's Nina Werkhäuser says the reason is all too obvious. (15.03.2011)
'There are no safe nuclear power plants'

The post-earthquake crisis at Japan's nuclear power stations has unleashed a wave of anti-nuclear protests at a time when the nuclear energy industry was
experiencing a global renaissance. (14.03.2011)
A UD I OS A N D V ID E OS O N T H E TO PIC
Germany begins a nuclear plant safety review (15.03.2011)
Date 15.03.2011
Related Subjects Angela Merkel, Energiewende (Transition to renewable power sources)
https://www.dw.com/en/merkel-shuts-down-seven-nuclear-reactors/a-14912184 Page 2 of 3
He used to rule Germany. Now, he oversees Russian energy companies and lashes out at the U.S. - The Washington Post 11/5/20, 9:46 am
Democracy Dies in Darkness
He used to rule Germany. Now, he

oversees Russian energy companies and
lashes out at the U.S.
By Rick Noack
August 13, 2017 at 4:21 a.m. GMT+10
For seven years, Gerhard Schröder was the leader of the most
populous democracy in Western Europe. He modernized the country's
social security system, angered George W. Bush by refusing to participate
in the invasion of Iraq and was only narrowly ousted in an election defeat
to Angela Merkel in 2005. Schröder could have easily spent the rest of his
career as an elder statesman, attending summits and writing books.
Instead, Schröder — a friend of Vladimir Putin who has

defended Moscow's top man as a “flawless democrat” — opted for a
career in the Russian business world.
Schröder has spent much of the past decade working for the Russian
energy industry, serving as a board member of several consortia in which
Russian-government-controlled energy company Gazprom is either the
majority or sole shareholder.
https://www.washingtonpost.com/news/worldviews/wp/2017/08/08/he-…he-oversees-russian-energy-companies-and-lashes-out-at-the-u-s/ Page 1 of 11
AD
His astonishing career in the Russian energy industry reached new

heights this week when the former chancellor was nominated for
a position as an independent director on the board of Rosneft, Russia's
largest oil company — and one in which the Kremlin also holds a
controlling stake. The nomination had been rumored for days and was
confirmed by a government decree published late on Friday
night. Schröder's office did not respond to an interview request by The
Washington Post.
An unlikely rehabilitation
At a time when Russian business connections among members of Trump
administration have come under growing scrutiny, Schröder's case
stands out as the perhaps most blatant example of a Western politician
having conflicts of interests when it comes to Moscow. “By becoming
a well-paid official of a foreign, aggressive power he has damaged the
reputation of the political class more than any other living politician,”
said Stephan Bierling, an international politics professor at the
University of Regensburg.
AD
Yet, despite his obvious links to the Russian government which are
considered embarrassing by many Germans, Schröder has recently made
a comeback among Germany's Social Democrats, or SPD. The former
chancellor was applauded by party members during a rare campaign
speech at a party convention in June.
“What happens in the U.S. needs to be openly and harshly criticized,”

said Schröder in the speech, during which he did not mention alleged
Russian election interference, the conflict in Ukraine or Russian human
rights abuses. Although Schröder stated he was “not anti-American,”
he went on to criticize the United States' “monstrous” political influence,
and he urged Germans to ignore Trump's demands to spend at least 2
percent of GDP on defense. There was long applause for his remarks,
which implied the need to improve relations with Russia.
Schröder no longer holds any active official position in the party, and
Thorsten Benner, the director of Berlin's Global Public Policy Institute,
cautioned that “it would be wrong to see Schröder as the mastermind
behind SPD policies on Russia.”
But as the last SPD politician to become chancellor, Schröder's advice is

increasingly back in demand. The Social Democrats are a junior partner
in Merkel's governing coalition and seemingly offer little meaningful
difference from her Christian Democratic Union. Current SPD leader
Martin Schulz, Merkel's only serious challenger in Germany's general
election in September, appears headed for yet another sizable defeat.
AD
Still, some Social Democrats worry about glorifying a man who won two
elections but crossed ethical boundaries in an unprecedented way after
losing his third. Schröder's renewed popularity among parts of the
German left has also stunned conservatives, who are concerned about
possible Russian election interference in September.
“Does Schröder only fight for the SPD, or does the SPD also fight for
him — the Chairman of the Shareholders Committee of Nord Stream 2, a
100-percent sister company of the state giant Gazprom?," asked
German tabloid Bild of its mostly right-leaning readers, referring to the
expansion of a natural gas pipeline that connects Russia and Western
Europe.
A deal, a hug, and an international backlash

Schröder's current tightrope walk between the sidelines of German
politics and the forefront of Kremlin-connected commerce is as
astonishing as the path he took to get there.
AD
As chancellor, Schröder championed the North Stream pipeline deal with

Russia. The German government pursued the offshore pipeline between
Russia and Germany to cut energy costs and establish a reliable supply
route, but the U.S. largely viewed it as a Russian attempt to make Europe
more dependent on the Kremlin. An expansion of the now-finished
pipeline has been targeted by recent U.S. sanctions, pitting Washington
against Germany and Russia on the issue.
Fears in Washington over the pipeline date back to 2005, when

Schröder hastily signed the deal during his last days in office. Then, just
weeks after leaving politics, he began to oversee the implementation of
the gas pipeline project himself — this time as a businessman in Russia
and as the head of Nord Stream AG's shareholder committee.
His move to Russia soon raised doubts about numerous other policies he
had pursued. “Throughout his term in office, Mr. Schroeder thwarted
attempts to put unified Western pressure on Russia to change its
behavior,” The Washington Post's editorial board summarized in
2005. “We can only hope that Germany's new chancellor, Angela Merkel,
uses this extraordinary announcement as a reason to launch a new
German policy toward Russia, one based on something other than Mr.
Schroeder's private interests.”
AD
Merkel did take a harsher stance on Russia in the following years, during
which she sought a stronger alliance with the U.S. Meanwhile, Schröder's
embrace of Russia continued undeterred.
In 2014, at the height of the Ukraine crisis, Schröder celebrated his 70th
birthday with Putin, sparking an international backlash. By opting for a
post-politics business career in Russia, his critics said, Schröder had
essentially chosen to join the Putin administration.
His own former party was outraged at the time. “For anyone fighting for
human rights and against Putin’s aggressive politics, this seems cynical,”
the Social Democrats' human rights spokesman told reporters after the
Schröder-Putin meeting in 2014.
AD
A badly needed success story

Three years later, however, a growing number of people on the German
left have started to admire Schröder again. While many are still skeptical
of the radical welfare-state revisions he introduced, some German left-
wingers have recently started to acknowledge that the unpopular project
paved the way for Germany's current economic prosperity. He's also
remembered as a “fighter with guts,” as Benner put it, for standing up to
the U.S. during the Iraq War — something the Trump era may call for
again.
Perhaps most importantly, said Benner, Schröder is seen “a strong

campaigner who showed how to take on Merkel” — something the SPD,
which trails Merkel's party by at least 15 percentage points, has lacked
since his departure.
AD
Schröder's rehabilitation also fits in with the traditional patterns of

German politics. “Germans on the left and the far right have always had a
weak spot for Moscow — [perhaps because] the relationship seemed to
be on more equal footing than with the U.S. which remains the only
superpower,” said Bierling, the Regensburg international politics
professor. “If Putin had not invaded Crimea and eastern Ukraine, many
Germans would see him as a natural ally in times of transatlantic
estrangement.”
Indeed, the current anti-Putin sentiment in Germany might not last

forever. With global confidence in the U.S. in free-fall due to the Trump
administration's policies, Schröder and other pro-Russian voices in
Germany are finding it easier again to defend Putin, said Bierling — and
so, too, are many Germans finding it easier to forgive and forget when it
comes to their former leader.

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49001 JDM Week 8 Class Exercises - Online

49001 Judgment & Decision Making Autumn 2020

Exercise 1: Nuclear power in Germany

49001 Judgment & Decision Making Autumn 2020

Question 4: Using a combination of perception and quasi-rational inference, what

49001 Judgment & Decision Making Autumn 2020

Exercise 2: Evaluating cognitive processes

“The Bangaloo Maintenance Bid”

49001 Judgment & Decision Making Autumn 2020

Given your understanding of the Influences on Quasi-rational Judgment from Chapter 7

For each letter (A-Z), list the possible biases involved.

49001 Judgment & Decision Making Autumn 2020

49001 Judgment & Decision Making Autumn 2020

TOP STORIES / GERMANY

Merkel shuts down seven nuclear reactors

The shutdown affects those power stations that were

Author: Ben Knight (Reuters, dpa)

European stocks plummet amid nuclear fears

Too hot to handle? EU meets to examine nuclear energy safety

Opinion: German government discovers the risks of nuclear power

'There are no safe nuclear power plants'

Germany begins a nuclear plant safety review (15.03.2011)

Related Subjects Angela Merkel, Energiewende (Transition to renewable power sources)

Democracy Dies in Darkness

He used to rule Germany. Now, he

August 13, 2017 at 4:21 a.m. GMT+10

Instead, Schröder — a friend of Vladimir Putin who has

His astonishing career in the Russian energy industry reached new

“What happens in the U.S. needs to be openly and harshly criticized,”

But as the last SPD politician to become chancellor, Schröder's advice is

A deal, a hug, and an international backlash

As chancellor, Schröder championed the North Stream pipeline deal with

Fears in Washington over the pipeline date back to 2005, when

A badly needed success story

Perhaps most importantly, said Benner, Schröder is seen “a strong

Schröder's rehabilitation also fits in with the traditional patterns of

Indeed, the current anti-Putin sentiment in Germany might not last

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