Dr. Kevin Lanning
Spring 2004

Psychology 4930 - Thinking and Decision Making

Lottery analysis spreadsheet is here (file is ~ 7 MB).

Introduction

The study of thinking and decision making is central in the liberal arts, for it lies at the nexus of the two major approaches to understanding the world, reason and empiricism.  In this course, we will consider both normative models of how we should reason and empirical studies of how we in fact think and decide. 

In recent years, the primary focus of research has been on seeming discrepancies between normative models and empirical data.  These discrepancies call into question a central premise in both psychology (that behavior is largely functional) and economics (that people are rational decision makers).  As a consequence, work in the area has mushroomed.

The study of thinking and decision making has practical as well as academic significance.  In this course, by understanding normative models and human shortfalls, you are likely to learn to reason better, and to make better decisions in your own personal life and career (Nisbett, Fong, Lehman, & Cheng, 1987).  This is not a trivial thing.

Prerequisites

Ideally, students should have either social or cognitive psychology.  Students who have had only introductory psychology may also enroll if they have had one or more courses in economics or statistics. 

Instructor

Dr. Kevin Lanning (lanning@fau.edu). My office is MHC 145; office hours are TBA

Texts

Baron, J. (2000). Thinking and deciding (3rd ed.). NY: Cambridge UP. (required)

Hastie, R. & Dawes, R. M. (2001). Rational choice in an uncertain world. Thousand Oaks: Sage (also required)

In addition, a number of research articles will be assigned, many of which are or will be  hyperlinked to this syllabus.

Grading & assignments

Grades in this class will be based on exams (20% midterm, 30% final), a term paper/presentation (25%), and class participation (25%). Specifics on the structure of the exam and term paper/project will be given at a later date. Class participation will be gauged by written questions/comments which are to be submitted at the beginning of each class denoted by an asterisk on the syllabus.

Other

All dates are subject to change. While the core of the course will remain the bulk of the Baron and Hastie & Dawes texts, I am confident that we'll tinker with specific assignments as we go along.  Please check the links below for updated assignments.

In enrolling in this course, students agree to abide by the Honor Code of the college, whose full text can be found here.

Topics

Part I: Introduction
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Decision pretest

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Descriptive, normative, and prescriptive approaches

Part II: Two types of reasoning
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Logic, mental models

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Wason task

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Hypothesis testing and falsification

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Deduction vs. induction

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Probability

Part III: Heuristics and biases
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The availability heuristic

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Confidence and calibration

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The representativeness heuristic and base rate underutilization

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The conjunction effect and scenario-based reasoning

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Other heuristics and biases: Probability matching and hindsight

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Improving probabilistic reasoning

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Randomness, causation, and regression to the mean

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Illusory correlation

Part IV: Utility

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Subjective expected utility theory

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Prospect theory

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Framing effects

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Regret

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Loss aversion and the endowment effect

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Sunk costs

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Decision analysis and the measurement of utility

Part V: Issues and applications

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Linear models, clinical vs. statistical prediction

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Anchoring & adjustment

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Negotiations and conflict resolution

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Cooperation and the commons

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Long-term vs. short-term decisions

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Risk

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Student presentations

Up to Dr. Kevin Lanning, Honors College, Florida Atlantic University

   Revised 04/23/04