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Copy of Daniel Kahnemen, TOK 2013
Transcript of Copy of Daniel Kahnemen, TOK 2013
Illusions of validity
Key Concepts: cognitive illusions
Who is Daniel Kahneman?
The endowment effect is the tendency to give higher value to things that you own, and less to those that you do not.
Heuristics are tools utilized by system 1 to make quick decisions or arrive to conclusions about something based only passed experiences
Daniel Kahneman is well known for his "system 1 and 2" theory, which divides mental processes as being carried out by two distinct systems in the brain.
System 1 and 2
Prospect theory is based off the idea of "loss aversion". It says that people are more likely to act to avert a loss than to achieve a gain.
Also, framing, a cognitive illusion, is key to this theory. The reference point for a loss or a gain effects the brain's decision making.
A town has two hospitals: one large and one small. Assuming there is an equal number of boys and girls born every year in the United States, which hospital is more likely to have close to 50 percent girls and 50 percent boys born on any given day?
A. The larger
B. The smaller
C. About the same, say within a few percent of each other
A team of psychologists performed personality tests on 100 professionals, of which 30 were engineers and 70 were lawyers. Brief descriptions were written for each subject. The following is a sample of one of the resulting descriptions:
What is the probability that Jack is one of the 30 engineers?
A. 10–40 percent
B. 40–60 percent
C. 60–80 percent
D. 80–100 percent
How many dates did you have last month?
On a scale of 1 to 5, how happy are you these days (5 being the happiest)?
Imagine that you decided to see a play and you paid $10 for the admission price of one ticket. As you enter the theater, you discover that you have lost the ticket. The theater keeps no record of ticket purchasers, so the ticket cannot be recovered. Would you pay $10 for another ticket to the play?
- Israeli-American Psychologist
-Born in 1934
-Lieutenant in the Israeli Defense Forces
- Awarded 2002 Nobel prize in economics
- Currently a senior scholar and faculty member at Princeton
Daniel Kahneman was awarded the the 2002 Nobel Memorial Prize in Economic Sciences for his work on "prospect theory".
However, Kahneman is not an economist. He is notable for his work on the psychology of judgment and decision-making, behavioral economics.
Daniel Kahneman's book "Thinking Fast and Slow" is a thorough summery of his work, and has become a best seller.
Thinking Fast and Slow
Kahneman hopes to change our vocabulary so that one day, we will be correcting each other's cognitive fallacies and illusions with the key terms from his research.
What do YOU think the practical benefits are that we derive from an understanding of our irrational mental processes?
Exposing humanity's irrationality
The Anchoring effect shows our tendancy to give weight or be influenced by irrelevant numbers
The availability heuristic is a mental shortcut that occurs when people make judgments about the probability of events by how easy it is to think of examples
Substitutions is a common heuristic in system 1. It is the tendency to replace a difficult question with a more simple one.
Jack is a 45-year-old man. He is married and has four children. He is generally conservative, careful, and ambitious. He shows no interest in political and social issues and spends most of his free time on his many hobbies, which include home carpentry, sailing, and mathematics.