- each person makes many decisions a day
- daily decisions are made without much attention/introspection
- often governed by
- habit
- personality
- previous experience
- Big/special/new decisions require more thought
Rational Decision Making
- i.e. choosing a product in grocery store
- prioritization of decision making
- habits usually stay habits
- follow social conventions
- Unconscious list of characteristics made for an item
- pick based upon best characteristics for that list
- list has multiple prioritization
- i.e. based on price
- Rational decision making
- people make choices that maximize their interest/match their list
- for groceries decision is simple, and out of habit
- complicated long term decisions what to do?
- First collect information
- compare options
- think about long term cost/benefit
- risk/hazards
- emotion, what do you care about?
- issues
- perfect information not available
- long term cost/benefit not specifically known only estimated
- How to deal with issues to remain rational?
- probabilities give us a good idea of unknowns
- modeling/prediction
- however, this is not applicable to general public
- field of engineering
- many theories and books about decisions
- multiple criteria
- additional variables included, compare dissimilar components
- sustainability added into the field
Limits of Rationality
- lack of information is the clearest barrier
- i.e. grocery shopping
- we don't know where the food was grown
- the wages of the workers creating the product
- Available information misleading/not full situation
- i.e. electric hand drier may save paper, but it also consumes electricity
- In addition, people often aren't trained to process information fully rationally
- usually in life, a good enough answer that may not be fully rational is acceptable
- human perception is selective not comprehensive
- we always filter and interpret, not look at big picture
- often see what we expect to see based on prior experience
- Memory is limited
- we can only handle about 5-7 units of different information at the same time before forgetting
- we can overcome this by grouping terms to increase the size of units
- i.e. telephone numbers
- Attitudes/biases
- habits/previous information influence choices
- Sheer mental capability
- not everyone trains the mind to calculate options
- bounded rationality
- make decisions based on what we have available
- simplify this using heuristics, rules of thumbs to approximate rationality
Cognitive Heuristics
- Daniel Kahneman and Amos Tversky psychologists who helped clarify heuristics
- Availability Heuristic
- ability to use information stored in memory
- when event is easily recalled, consider it in future
- easiest choice to imagine or recall more likely to believe in occurrence
- created biases
- i.e. belief in jets crashing frequently because crashes are covered rather than successful flights
- variety of applications in this heuristic
- television ads in order to spread information
- public service ads have direct effects on popularity of products
- power of celebrity status to influence choices regardless of their actual ability
- vivid memories recalled over potentially accurate more longwinded ones
- difficulty with precautionary principle
- we remember catastrophes over mundane success
- difficulty with implementing nuclear power
- Anchoring and Overconfidence
- people tend to anchor to initial facts
- first impression most important
- causes difficulties in negotiations, hindering
- Problems with Probability
- we see patterns inappropriately
- i.e. flipping a coin
- if we see 9 heads in a row
- think we "are due for tails"
- but this is imposing on the random chance of flipping the coin
- same ideas with 100 year on average floods or forest fire chances
- Uncertainty
- people avoid probabilities and uncertainties
- lean towards certainty, desire to have control
- avoid circumstances where input is hopeless because uncertainty is great
- public's confusion on climate
- predictions technologically based are difficult because few are qualified
- exaggerations/fear tactics used
- people rarely act on fear?(questionable statement raised by book)
- multiple biases overlap since biases may draw people in different directions
- increase in scale of complexity does not help non experts
- only logical information reinforced by experience often stays
- i.e. cherry blossoms in japan changing time of bloom
- Discounting the future
- Economically beneficial decisions can have ecological downsides
- short term benefits are easier to see over long term ones
- politicians and corporations focus on next elections/quarterly goals
- importance of extending timeframe people can see
- change needs to be bottom up in terms of sustainability
- Complexity
- the more complicated the system, the less likely people will think about it
- mental overload
- tragedy of the commons
- commonwealth where people over invest in their own wealth
- causes depletion of shared wealth, collapse of system
- difficulty of perspectives values and attitudes of different peoples in addition to the complexity of actual problems
- How Barriers to Rationality Affect Decisions
- biases make decision making difficult even if people are given more time
- mental shortcuts such as availability heuristic override longer term decision making
- lack of trust
- some corporations promote biomass usages
- green movements automatically distrust corporations dissuades some from using viable source
- Heuristics we have now are more suited to small communities/neighborhoods
- in history useful for finding food
- building shelter
- care for own young rather than community
- Discomfort with uncertainty promotes non-action
- Experts in fields frequently stopped by publics overreaction to miimal risks
- nuclear plant meltdown
- Emotional overturns can also affect rationality, in both a positive/negative way
- i.e. issues with food pesticides effect on infants
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