Decision Traps – Lecture
Making decision is a key activity for individuals working in organizations but also for everyman in his everyday life. Decision process leads to choices from among two or more alternatives. Judging and choosing alternatives may be easy or difficult, fast or slow. Each decision is a process that is influenced by various psychological factors, e.g. perception, emotions, decision styles or group impact. This lecture presents an overview of the psychology of decision making.
The lecture/teaching sessions will cover the topics listed below:
1. Introduction to decision making
The first module will introduce two main approaches to decision-making process: normative and descriptive. We will discuss how decision should be made in light of normative theories (to optimise choices) and show that people deviate from rationality (using “satisficing” rules).
2. The role of perception in judgments
In this module we plan to acquaint students with the different cognitive factors influencing our perception and decision making (e.g. overconfidence, availability, confirmation, anchoring). For this purpose, we plan some exercises showing participants how those biases and heuristics impact human cognitive system in the context of decision-making process.
3. Framing and the reversal of preferences
In this section we will consider how different frames affect our decisions. We will present that normatively irrelevant information can dramatically change people’s preferences.
Students will take part in exercises in which they will be demonstrated the framing effect, where a slight difference in the decision problem formulation may lead to different behaviour. We will also focus on the main phenomenon responsible for framing i.e. loss aversion. At the end of this section, we will discuss some examples of the implementation of framing in various economic areas, such as price policy, taxation, or negotiation.
4. Improving Decision Making
The last part of the course will be devoted to present exemplary tools that can improve the decision-making process and may be helpful in overcoming some of the described decision traps.
- Dr Katarzyna Idzikowska, Ph.D. in Psychology, Interdepartmental Interdisciplinary Doctoral Studies by the Faculty of Economic Sciences, conducted by the Institute for Social Studies, University of Warsaw, Poland. Full Bio
- Dr Sabina Kołodziej, Ph. D. in Psychology, Silesian University in Katowice, Faculty Pedagogy and Psychology; Department of Psychology, Ph. D. thesis applied to psychological and cultural determinants of entrepreneurship. Full Bio
Language of instruction: English