IDS Thinking and Decision Making

Transcription

1 r. Kevin Lanning r. Kanybek Nur-tegin Spring 2010 IS Thinking and ecision Making 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. Academically, the field lies on the border of Psychology and Economics, where it is close to the subdiscipline of ehavioral Economics. The sources we will consider this term derive from both disciplines. The leading figures in the field include aniel Kahneman, a psychologist, who was awarded the Nobel Prize in Economics in 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. Much of the 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 (Lilienfeld, Ammirati, & Landfield, 2009; Nisbett, Fong, Lehman, & heng, 1987). This is not a trivial thing.

2 Lanning & Nur-tegin, Spring Prerequisites Instructor Texts Ideally, students should have taken one or more (ideally more) courses in psychology, economics, and/or statistics. r. Kevin Lanning Office is W 220; hours are MW 2-5 & by appointment. r. Kanybek Nur-tegin (knurtegi@fau.edu). Office is HA 121; hours are M 3:30 pm 5:30 pm, T 12:00 pm 4:00 pm and by appointment. Hastie, R. & awes, R. M. (2010). Rational choice in an uncertain world, 2nd Ed. Thousand Oaks: Sage (required) aron, J. (2008). Thinking and deciding (4th ed.). NY: ambridge UP. (strongly recommended; 3rd Ed ok) owmaker (Ed.), Economics uncut, Elgar (recommended) Ariely,. Predictably irrational (Expanded edition), Harper Perennial (recommended) In addition, a number of research articles will be assigned and available on MyFAU Grading & assignments Other Grades in this class will be based on exams (20% midterm, 30% final), a term paper (25%), and class participation (25%). Specifics on the structure of the exams and term paper/project will be given at a later date. Each student will be assigned to a group (A,,, or ). lass participation grades will be assessed, in part, by structured contributions to class on the designated dates (see below). In addition, there may be in-class exercises and pop quizzes. All dates are subject to change. It is probable that we'll tinker with specific assignments as we go along. In enrolling in this course, students agree to abide by the Honor ode of the college, whose full text can be found at

3 Lanning & Nur-tegin, Spring Mtg ate Topic Required reading Additional references Grp. Part I: Introduction 1 1/10 ecision pretest --- (Nisbett, 1987) 2 12 Thinking, deciding, and understanding Hastie aron 1 A 3 19 ecisions and expected utility Hastie Sunk costs Hastie aron 12 (Arkes, 1999) (oettcher 2009) 5 26 escriptive, normative, and prescriptive approaches --- aron Rationality Hastie aron 3 A Part II: Two types of reasoning 7 2/2 eductive logic --- aron 4 A 8 7 Hypothesis testing and falsification (Lilienfeld, 2009) aron eduction vs. induction (Rips, 2001) (Osherson, 1998) Probability Hastie Appendix aron 5

4 Lanning & Nur-tegin, Spring Part III: Heuristics and biases 11 2/16 Anchoring and adjustment Hastie 4 A Availability and representativeness Hastie 5 (Tversky, 1974) aron 6 23 Scenario based reasoning, Hastie 6 13 conjunction effect, probability matching and hindsight 28 Randomness, causation, regression Hastie 7 aron 8 14 to the mean, & illusory correlation (Gilovich, 1985) (Redelmeier, 1996) (Oster, 2004) 15 3/2 More randomness/ review A Part IV: Economic anomalies and contemporary culture 16 3/14 Exam Movie: Freakonomics (Levitt, 2004b) Economics of sport (Goddard 2005; also in owmaker, 12) A Economics of marriage and divorce (Friedberg, 2003; also in owmaker, 5) Economics of prostitution (aumeister, 2004) owmaker Economics of gambling (Levitt, 2004; also in owmaker, 13)

5 Lanning & Nur-tegin, Spring Part V: Games 4/4 The rationality of cooperation and (awes, 1988) aron competition (Hardin, 1968) A (Hardin, 1988) 6 The ultimatum game (Thaler, 1988) aron (amerer 1995) (Osumi, 2010) Part VI: Implications etc Probability revisited Hastie Evaluating choices Happiness, value Hastie 9 A 18 Temporal aspects (discounting, (Gilbert, 2007) aron affective forecasting) (Wirtz, 2003) (Morewedge, (Loewenstein, 1989) 2005) 20 Prospect theory, framing effects Hastie 12 aron (Kahneman, 1991) (Kahneman, 2003) hoice strategies Hastie Review Hastie 14 aron 9 A