Book T of C
Chap T of C
This is the 2007 version. Click here for the 2017 chapter 07 table of contents.
It should be no surprise that research shows humans are not perfectly rational decision makers. A well-known body of work in cognitive psychology revolves around identification of biases and fallacies in human reasoning. Some of the most famous-with a simple example of each-are listed below. Many were identified by Amos Tversky and Daniel Kahneman, Israeli-American psychologists who studied human reasoning for many decades. Tversky, who died in 1996, was a McArthur "Genius Award" winner; Kahneman won a Nobel Prize in Economics in 2002, although he never took a course in economics and spent his entire career as a psychologist.
What are some widely-known decision-making biases of humans?
People give negative consequences more weight than equal positive consequences. [For example, Tversky found that students refused to stake $10 on a coin flip if the odds of winning were 50/50. On the average, they required a $30 payoff before they would take the chance.]
People do not deal rationally with very improbable events. [They will enter sweepstakes and lotteries in which their chances are minuscule, or they will be afraid of an elevator crashing to the ground or a shark attack at a beach, all extremely unlikely events.]
People ignore summary statistics, such as base rate information, in favor of concrete, anecdotal information. [Richard Nisbett pointed out that people will base a decision on something they heard from a friend, rather than relying on accumulated statistics. Consumer Reports may show that Volvos are very reliable, but a person might avoid them because "My brother had trouble with his Volvo and says he will never buy another."]
People show a "confirmation bias " [They fail to change their minds when faced with evidence that their beliefs are incorrect, and they select evidence which supports their pre-existing beliefs.]
People overestimate the frequency of events that come readily to mind (the "availability heuristic"). [For example, people think airplane crashes are common because they easily remember examples of plane crashes.]
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Copyright © 2007-2011 Russ Dewey