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Skip to 0 minutes and 9 seconds So today I’m going to be talking about complexity in decision making and cognition. So why do individuals try to reduce complexity? Human beings are cognitive misers. This term cognitive misers was coined by Shelley Fiske and Susan Taylor. And it means that individuals try to think as little as we possibly can. Why is that? Well thinking requires and uses up energy, and energy is a limited resource. In addition, human beings can only process so much information at a time. We have a limited bandwidth, unlike for example, computers. So when in a complex situation, when there’s complexity in our environment, we tend to rely on what are known as heuristic processing.

Skip to 0 minutes and 53 seconds Heuristics are a strategy to simplify the world and make things more efficient. In other words, heuristics helps to reduce the complexity in our environment. There are three types of heuristics that I’m going to talk about today; the base-rate fallacy, the illusion of control, and the representative heuristic. So the first one, the first heuristic is the base rate fallacy. This is people’s tendency to ignore what is generally true, the base rate. And to rely instead on specific, salient, and familiar examples, which are often faulty, and which give us false information. So take for example, a situation where you’re at a bar. And you’ve had a little too much to drink. Your car is outside the bar.

Skip to 1 minute and 37 seconds You’re not sure whether or not you should drive home or should find an alternate way to get home, maybe a taxi, or find a friend to drive you. Kind of a complex situation, a lot of variables going on here. In a situation like this, we’re not going to think about the rule, the base rate. Think about things like, well, how many accidents are caused by drunk drivers? Or what is the legal limit for drinking? These are the base rates. Instead we’re going to rely on specific salient examples. So how good of a driver am I? How much alcohol do I think I need to have before I can’t drive well?

Skip to 2 minutes and 11 seconds I might even think about examples like, my colleague Fred, who drives all the time drunk and never gets in an accident. These are going to give us faulty information. These examples are going to give us faulty information. It’s much better for us to think about the base rate or the average. But in complex situations we don’t do that. We think about specific salient examples and ignore averages. The second heuristic we often engage in in complex situations is what is known as the illusion of control. This is where we believe that we have control over chance event. A completely random event. So a great study was done by Friedland and his colleagues, where he rolled a dice.

Skip to 2 minutes and 53 seconds And a dice is a random event, we don’t have any control over where that dice lands. He played this game with participants and he said OK, if you guess the number that comes up on the dice that I’m about to roll, you’re going to get a monetary prize. Something that people clearly desired. And people had the choice to either guess that dice roll before the experimenter rolled the dice, or after the experimenter rolled the dice. Either way they wouldn’t see it until they actually said their guess. People actually preferred to guess the number before the dice was rolled rather than after. Because they believed that they would have control over the outcome if they said it before rather than after.

Skip to 3 minutes and 34 seconds In either way it’s a random event, but people have the illusion of control. They believe that they have control over chance events. Another great demonstration of this was demonstrated in a publication in the magazine Science, by two researchers Jennifer Whitson and Adam Galinsky. And they actually show that when we feel like we lack control in our environment, we’re more likely to believe or to imagine patterns in the world that don’t actually exist. So they found in this study that when people felt like they lack control, they were more likely to see, or imagine they saw meaningful images and absolute visual static. So in situations where we lack control, we actually believe that we have control.

Skip to 4 minutes and 20 seconds Random situations, situations that are very complex, we feel like we’re lacking control. And the last heuristic I’m going to talk about is the representative heuristic. This is the extent to which we notice an event based on how much it conforms to a pre-existing belief we have about the world. So if we think for example, that two things are related to one another, we might tend to notice instances of these things coexisting the world, and ignore those situations that don’t represent our pre-existing view. So I want to take an example, and as an American, I think I can insult other Americans. But let’s say I have a belief that Americans are loud and obnoxious.

Skip to 5 minutes and 1 second So every time I see a loud and obnoxious American, this represents my way of seeing the world, I’m going to notice it, it’s going to be salient to me. And this noticing, the salience, is going to lead to what’s known as an illusory correlation. Over time, I’m actually going to believe that these two things, Americans and being loud, are correlated, or related to each other. And this illusory correlation is going to lead to a belief. So this representative heuristic, believing that two things are related, and noticing those instances, ignoring instances that don’t confirm my way of seeing the world, leads me to believe there’s a correlation that Americans are loud. I’m not going to notice the quiet, soft, polite Americans.

Skip to 5 minutes and 45 seconds And this illusory correlation is the basis of why human beings stereotype. And stereotype is the topic I’m going to talk about in the next lecture. I’m going to talk about how complexity in our environment leads us to stereotype other individuals.

Decision making in a complex environment

This video explores how complexity influences our decision making.

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Decision Making in a Complex and Uncertain World

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