COGNITION

LECTURE 7
“A journey, after all, neither begins in the
instant we set out, nor ends when we have
reached our door step once again. It starts
much earlier and is really never over, because
the film of memory continues running on
inside of us long after we have come to a
physical standstill. Indeed, there exists
something like a contagion of travel, and the
disease is essentially incurable.”
 COGNITION

Cognition – all the mental activities associated with

thinking, knowing, remembering, and communicating
through…...
Concepts – mental groupings of similar objects,
events, ideas, or people.
Prototypes – mental image or best example of a
category.
 COGNITION

Mental set – a tendency to approach a problem in one

particular way.

O–T–T–F–F–?–?–?
J–F–M–A–?–?–?
 CONFIRMATION BIAS

Confirmation bias – the tendency to search for

information that supports our preconceptions and ignore
or distort contradictory evidence.
 COGNITION

How do we make decisions?

1) Automatic thinking: A quick decision-making process that
occurs unconsciously or “without thinking”.
• We use shortcuts, known as heuristics (rules of thumb), which
save us time, but can lead to misjudgments.
2) Controlled thinking: An effortful, deliberate, and pausing to
think about self and the environment, carefully selecting the
right course of action.
 INTUITION

Intuition or Instincts are effortless, immediate, automatic feelings

or thoughts instead of relying on more objective information.
“There can be as much value in the blink of an eye as in months of
rational analysis.”
- Malcolm Gladwell

When it happens, it’s hard to quantify or define, but it is there.

“I had a feeling there was something wrong with her. She just didn’t
seem like herself.”
 INTUITION’S POWERS

Intuition is…..
Analysis “frozen into habit” – implicit knowledge
Adaptive and enables quick reactions – “gut feelings”
Huge – unconscious processing of complex
information.
Consider the importance of nonconscious thinking – “sleeping
on it”
 REPRESENTATIVENESS

Representative heuristic estimates the likelihood of

events in terms of how well they seem to represent, or
match, particular prototypes.

Making mental shortcuts from our perceived plausibility

of a scenario to its probability.
 REPRESENTATIVENESS

The three major psychological findings that fall under

Representativeness:
1) Base Rate Fallacy – An unconscious failure to look at past
odds in determining current or future behavior.
2) Stereotype – To broadly generalize and categorize rather than
look for specific nuance.
3) Conjunction Fallacy – To assume specific conditions are more
probable than a single general one.
 REPRESENTATIVE

Tom is meek and keeps to himself. He likes soft music

and wears glasses. Which profession is Tom more likely
to be?
• A librarian or a construction worker

Covid-19:
“I’m not old or sick, so even if I do get it, I’ll be
fine.”
 CONJUNCTION FALLACY

Linda is thirty-one 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 antinuclear
demonstrations.
Which alternative is more probable?
1) Linda is a bank teller.
2) Linda is a bank teller and is active in the feminist
movement.
 NARRATION

The Power of A Story

Narrative fallacy – the human tendency to find simplistic explanations for
events, especially retrospectively.

The most coherent stories are not necessarily the most probable, but they are
plausible, and the notions of coherence, plausibility, and probability are easily
confused by the unwary.
Caution:
 The effect of these biases on our perception of expert opinion and forecasting.
 We are more likely to believe scenarios that are illustrative rather than
probable.
 NARRATION

“Stories are powerful because they are vehicles for imbibing moral
worldviews. If the worldview of a story resonates with the reader,
then the reader gobbles up the story and wishes to make it a reality.
If there is dissonance, then the reader loses interest or actively
hates the story. It is for this reason that no work of fiction is
universally loved, no matter how well told.”
- David Sloan Wilson
 NARRATION

A story is …
…where we came from.
…where we’re going.
…what connects us and binds us to each other.
…what defines us and sets us apart.

It is in the story of humanity, amongst love, fear and

failure, that we make meaning of our lives.
 NARRATION

A good story…
…has conflict, but ultimately resolves it.
…is messy and full of confusion, but there is meaning and
completeness to it.
…is about people and places.

Stories are…
…concrete, absolute, certain, mysterious, provocative.
…intriguing, suspenseful, full of tension.

Stories have natural momentum to them, fueling our passion to find

out more from the teller.
 NARRATION

Joseph Campbell – “The Hero with a Thousand Faces”

Argues that all mythic narratives are variations of a single
archetypal quest – “monomyth”.

On this “hero’s journey,” a young man sets out from his humdrum
life, confronts monsters, resists temptation, stares into the abyss,
and claims a great victory. Returning home with “the power to
bestow boons on his fellow men,” the hero can also claim the
freedom to live at peace with himself.
 AVAILABILITY

Availability heuristic estimates the likelihood of events based on

what is available to us at the time and assume such events are
common.
 AVAILABILITY

Examples:
Post 9-11 transportation: flying vs. driving
Child abductions vs. wearing helmets and seat belts
Accidents: coconuts vs. shark attacks
Investment decisions
Insurance policies: perceived risk vs. actual risk
Violence: Is the world a safer place today than it was 50, 100,
500 years ago?
 BELIEF PERSEVERANCE

Belief perseverance is clinging to one’s initial

conceptions after the basis on which they were formed
has been discredited.
Confirmation bias reinforces people’s belief
perseverance.
 FRAMING

Framing effect is when our decisions are influenced by

the way information is presented.
It influences how we see and interpret events in daily life.
How the news is reported can influence our behaviors.
 FRAMING

• Are you more likely to use a drug with a 95% success

rate or one with a 5% failure rate?
• What would you choose as a healthy food option, a
product that is 99% fat free or 1% fat?
• A 10% chance to win $100, and a 90% chance to lose $5.
 FRAMING
LOSS AVERSION

Loss aversion: Losses loom larger than gains. Therefore,

the pain of loss is twice as strong as the pleasure of gain.
• The impact of emotions and feelings on making
decisions.
• Investments – stock market behavior.
 FRAMING
PROSPECT THEORY

Scenario 1: Which would you choose?

A. Sure gain of $10,000
B. 50% chance of getting $20,000

Scenario 2: Which would you choose?

A. Sure loss of $10,000
B. 50% chance of losing $20,000
 FRAMING
RETIREMENT SAVINGS

We all need to think about retirement regardless of our age. The

earlier we start saving money the more we will have later in life.

Case 1:
• Plan A:
• Save 50,000 VND per day every day.
• Plan B:
• Save 1,500,000 VND per month every month.
 FRAMING
RETIREMENT SAVINGS

Case 2:
• Plan A:
• Save 50,000 VND per day every day.
• Plan B:
• Save 350,000 VND per week every week.
• Plan C:
• Save 1,500,000 VND per month every month.
 FRAMING
REFERENCE POINTS

Imagine you have $2000 in your checking account.

Case 1:
• Would you accept a fifty-fifty chance of either losing $300 or
winning $500?

Case 2:
• Would you accept a fifty-fifty chance of having either $1700 or
$2500 in your account?
 FRAMING

Framing has dramatic impact on socio-economic policies across

society and slight “nudges” can change people’s behavior in more
productive and positive ways.
• Choice Architecture or (Libertarian Paternalism) advocated by
Thaler & Sunstein (2008)

Public Health Policy

How can we as a society encourage people to donate their organs?
 FRAMING
NUDGING

Nudging
vs.
Advertising and Public Relations
Campaigns
 NUDGING

A nudge is any attempt at influencing people’s judgment, choice or

behavior in a predictable way that is motivated because of
cognitive boundaries, biases, routines, and habits in individual and
social decision-making.
Nudging is the systematic and evidence-based development and
implementation to change behavior.
Three Conditions on Nudging
1) Maintain Freedom of Choice
2) Transparency and Effectiveness
3) The Need for Evidence and Testing
 10 IMPORTANT NUDGES

1) Default Rules
2) Simplification
3) Use of Social Norms
4) Increases in Ease and Convenience
5) Disclosure
6) Warning, Graphics, or Otherwise
7) Pre-commitment Strategies
8) Reminders
9) Eliciting Implementation Intentions
10) Informing People of Past Choices
 OVERCOMING FRAMING BIAS

The first thing is not to automatically accept the initial frame of

problem or message. Try to reframe the message or the problem.
• If the message is framed positive then reframe it negatively.
• If it is framed as a gain, reframe it as a loss.
• Reframe the problem from different reference points.
• Reframe the problem in the reversal direction.
• Seek out different perspectives on the problem.
• Have people around who challenge your thinking.
• Encourage disagreements.
 ANCHORING & ADJUSTMENT

Anchoring effect is a cognitive bias where you depend

too heavily on an initial piece of information when
making decisions and fail to adjust from it.
 ANCHORING & ADJUSTMENT

Can A Judge’s Decision Be Influenced by the Roll of a Dice?

Several judges with more than 15 years of experience were asked to
read a case about a woman who had been caught stealing. They were
then asked to roll a dice (rigged to land on a 3 or 9) and as soon as the
dice landed – the judges were asked the following:
• Would they sentence the woman to a term greater to or less than the
number on the dice?
• To specify the exact prison sentence (in months) that the woman
would be subject to.
 ANCHORING

Testing real estate agents on the sales price of a home based on a

10-page packet of information where the only variance was the list
price.
When it was listed at $119,000, the average guess was $114,000.
When the list price was $149,000, the average guess was
$128,700.

Changing a few digits on a piece of paper influenced the price by

more than $14,000.
 OCCAM’S RAZOR

Occam’s razor – a heuristic which favors a form of problem

solving containing the fewest assumptions.

The simplest explanation is usually the

correct one.
Occam’s razor states that not only should you start with the
simplest and most likely explanation, you also shouldn’t
overcomplicate, or add any unnecessary extra layers to your
explanation.
 OCCAM’S RAZOR

Examples:
A UFO in the sky is:
1) Aliens from another galaxy.
2) A type of aircraft or drone you haven’t seen before.

Paleontologists have discovered dinosaur bones in the earth

because:
3) Dinosaurs once lived on the earth.
4) God (or Satan) put the dinosaur bones in the earth to test the
faith of Christians.