How Do People Make Judgments and Decisions Essay Example
How do people make judgements and decisions?
Decision and judgment-making are normal human activities and people make a high number of these every day, so you could assume that psychologists have been studying this area for many years but it wasn’t until the 1950’s that psychologists began their exploration into this subject. Behaviourism set the belief that psychology should be scientific and objective and should observe similar criteria to the natural sciences. The mathematicians and economists were more interested in how decisions should be made and how do we recognise good judgement and decisions.
Psychologists today think very differently to economists when it comes to behavioural research exploring decision making. As Lopes 1994(cited in Naish 2005) put it ‘Economics considers itself a normative science, the very term an oxymoron of ought and is’ The questions raised here is how do human beings actually form firm opinions and act on them and how judgments are reached from these opinions and does the evidence from what we ought to do regarding decisions and judgments represent what we actually do. I will argue that although theorists have come a long way, the evidence still doesn’t explain how we actually make judgements and decisions instead just highlights the discrepancies of the normative theory.
There are two main types of theories of decision making; descriptive and normative theories. The descriptive theory concentrates on how people actually make decisions and the latter defines how they should make decisions. The majority of research into decision-making is based on choices that have some kind of uncertainty to them. In other words; we take gambles. A descriptive model was proposed by Kahneman and Tversky (1979) known as the ‘prospect theory’. When making choices, we go through two phases; the editing and the second phase. In the former, problem solving begins and any issues that are irrelevant or unimportant can be disregarded, choices are
Decision and judgment-making are normal human activities and people make a high number of these every day, so you could assume that psychologists have been studying this area for many years but it wasn’t until the 1950’s that psychologists began their exploration into this subject. Behaviourism set the belief that psychology should be scientific and objective and should observe similar criteria to the natural sciences. The mathematicians and economists were more interested in how decisions should be made and how do we recognise good judgement and decisions.
Psychologists today think very differently to economists when it comes to behavioural research exploring decision making. As Lopes 1994(cited in Naish 2005) put it ‘Economics considers itself a normative science, the very term an oxymoron of ought and is’ The questions raised here is how do human beings actually form firm opinions and act on them and how judgments are reached from these opinions and does the evidence from what we ought to do regarding decisions and judgments represent what we actually do. I will argue that although theorists have come a long way, the evidence still doesn’t explain how we actually make judgements and decisions instead just highlights the discrepancies of the normative theory.
There are two main types of theories of decision making; descriptive and normative theories. The descriptive theory concentrates on how people actually make decisions and the latter defines how they should make decisions. The majority of research into decision-making is based on choices that have some kind of uncertainty to them. In other words; we take gambles. A descriptive model was proposed by Kahneman and Tversky (1979) known as the ‘prospect theory’. When making choices, we go through two phases; the editing and the second phase. In the former, problem solving begins and any issues that are irrelevant or unimportant can be disregarded, choices are