Judgment and Decision Making

Abstract

Judgment and decision making is an interdisciplinary field with many facets. Psychological approaches primarily focus on describing and understanding human behavior in (experimental) decision-making situations. Various methods to elicit judgments are described. Numerical probability estimates are evaluated according to rules derived from probability theory—that is, coherence—and overall accuracy-that is calibration. Experiments show under what circumstances coherence is violated and judgments are not well calibrated. Theoretical approaches to account for the observed behavior are presented: heuristics and bias-based models, including affect heuristic, fast and frugal heuristics; signal detection-based models; ecological models; error models; and dual-process models. The second part of the chapter describes six different types of decision making: (1) Decision making under risk and uncertainty in which each course of action produces a set of possible consequences; (2) intertemporal decision making in which a person has to choose among actions that have future consequences; (3) multi-attribute decision making under certainty with conflicting attributes; (4) experience-based decision making, in which a person learns to make decisions from trial-by-trial experience and feedback; (5) dynamic decision making in which the person must make a plan for a sequence of decisions across time; (6) decision neuroscience.