Problem-Solving and Decision-Making Processes:Deliberation, Intuition, and Expertise

CHAPTER 1:

Layout of the Book

• Part 1: overview of problem solving/decision making

• Part 2. Empiricism. Light on stats, more on JDM

• Part 3. Decision making• Part 4. Influence and group

decision making

Terminology

• Problem–Problem solving

• Decision–Decision making

• Judgment

The Problem Space

Navigating The Problem Space

Deliberative Method•  State, or “frame,” the problem to be solved;• Identify and prioritize the relevant values, interests and

objectives;• Identify and resolve major uncertainties concerning the

cause of the problem;• Generate a range of plausible solutions or alternative

courses of action;• Predict the consequences of the courses of action and

assess their impact on the relevant interests or objectives.

• Select the course of action that optimizes the interests or objectives to be served (i.e., make a decision);

• Implement, observe and learn from the outcome of the decision.

Evers v. Newport Records

•  Anna Wilkins, associate. Luis Trujillo partner• Represent Clyde Evers in breach of contract case• Evers sold custom accounting software to

Newport Records for $600,000. • Newport refuses to pay, saying that the software

does not do what Evers said it would do. •  Evers upset that nothing had happened since the

case was filed. Asks Anna to hasten its resolution.

Wilkins: • Contract disclaims any warranty of performance.

-> Proposes summary judgment.

Evers v. Newport Records (con’d)

Trujillo • Judge skeptical about summary judgment.  • Evers may have made extravagant oral representations. Even if not

formally binding, they may bias the judge further against summary judgment.

• Written disclaimer is not in the particular typeface required by law. Judge may have the jury determine whether or not the Newport’s president actually read and understood the disclaimer.

• Newport may have a claim against Evers for breach of warranty. The statute of limitations on Newport’s claim—which is shorter than that governing Evers’ claim—is about to run out. Evers’ motion may lead Newport’s lawyer to wake up and file a claim.

•  Cost of litigating the motion for summary judgment. – If the motion is denied, Evers’ costs will be increased. – If the motion is granted, Newport Records will likely appeal, with

attendant costs and the possibility of still having to go to trial.

Divergent and Convergent Aspect of Deliberative

Problem Solving

What’s Unusual About This Hand?

System 1 (intuitive) System 2 (reflective)Process Characteristics

Automatic ControlledEffortless EffortfulAssociative DeductiveRapid, parallel Slow, serialProcess opaque Self-awareSkilled action Rule application

Content on which Processes ActAffective NeutralCausal properties StatisticsConcrete, specific AbstractPrototypes Sets

The two-systems model of information processing

Bat and Ball

• Together, a bat and a ball cost $1.10

• The bat costs a dollar more than the ball

How much does the ball cost?

Bat and Ball• Together, a bat and a ball cost $1.10• The bat costs a dollar more than the

ball• How much does the ball cost?• $1.05 (bat) + $0.05 (ball) = $1.10

• We know how to calculate the right answer, but sometimes the answer that “jumps to mind” slips out.

Heuristics

• Mental shortcuts used in judgment and decision making

• Fast and efficient• Serve us well most of the

time… but not always