THINKING: DECISION-

MAKING
AND PROBLEM-SOLVING
Thoughts on Thinking
• Descartes considered the ability to think as an indicator of existence –
of being alive.

• language as a factor differentiating us from other animals, but without

the capacity to think, language would be disorganised and
incomprehensible.

• capacity to think therefore influences how we behave and navigate

through our daily lives

• There are individual differences, however, in how well we can adapt

our thinking to solve problems and make judgements and decisions
using information available to us.
Thinking defined
• thinking is, “cognitive behaviour in which ideas, images, mental
representations, or other hypothetical elements of thought are
experienced or manipulated, it is covert, not directly observable but
must be inferred from actions or self-reports, it is symbolic. It involves
operations on mental symbols or representations.” (APA, 2020).

• There are different types of thinking

• The different forms of thinking will be the basic structure for

understanding how we think, beginning with making judgements
six different types of thinking (Eysenck and Keane, 2015)
1 Judgements are considered to be a sub-set of decision-making and
involve the careful consideration of how likely events will occur

2 Decision-making involves the selection of one possible option from

more than one

3 Informal reasoning involves the evaluation of the strength of an

argument by using existing knowledge and personal experience

4 Inductive reasoning involves making decisions about the truthfulness

of a statement using the information available. Unlike deductive
reasoning, logical conclusions are not always possible
six different types of thinking (Eysenck and Keane, 2015)
5 Deductive reasoning involves forming logical conclusions based on
information (such as statements) known to be true

6 Problem-solving involves, first, the identification of the problem, and

second, formulating a stage-by-stage plan of solution.

• Depending on the nature of the problem, any of the above types of

thinking may be used
1 JUDGEMENTS
• assessment of the probability of a given event occurred based on
incomplete information

• judgements are not set in stone as we can change our original

conclusion when we receive new information

• there are situations where judgements made are in error

• We are generally poor at considering base-rate information
• Base-rate: the naturally occurring frequency of a phenomenon in a population
• Base-rate fallacy: when a person judges that an outcome will occur without
considering prior knowledge of the probability that it will occur. They focus on
other information that isn't relevant instead.
1 JUDGEMENTS - Heuristics
• When information is incomplete, we tend to ignore base-rate data, and instead
rely on a ‘rule of thumb’ approach

• This rule of thumb known as a heuristic provides us with quick accessible

guidance on decision-making

• representativeness heuristic - used for deciding whether events, individuals or objects

belong to a category based on traits that are typical of the category

• availability heuristic - which claims it is easier to estimate how often an event occurs based
on the ease of its retrieval from long-term memory

• ‘fast-and-frugal’ heuristic - three rules are applied: searching, stopping and decision-making
• engage search cues until the right one helps answer the question.
• know when to stop, as continuing is a waste of time and effort
• decision can then be made
DUAL-PROCESS THEORY
• System 1

Includes an automatic, effortless and fast cognitive process that is

difficult to stop, control or change.

• System 2

Includes a serial, effortful, monitored, directed and slow cognitive

process that can be changed or modified at any point. Note this is not a
form of heuristics.
DUAL-PROCESS THEORY
• SYSTEM 1 • SYSTEM 2
• Fast and Effortless • Slow and effortful
• Automatic • Logical
• Impulses • Reflection
• Drives • Planning
• Habits • Problem Solving
• Beliefs • Conscious
• Associative • Controlled
• Rapid • Serial
• Emotional • Rule Application
• Based on Experiences • Based on Consequences
DUAL-PROCESS THEORY
DUAL-PROCESS THEORY
2 DECISION-MAKING
• judgements is considered to be a sub-set of decision-making

• a ubiquitous phenomenon

• There are different types of decision-making

• types of decisions form as a result of the exclusion of one option from another

• ‘utility theory’ as a way of explaining the basis for our decision-making.

• implies that we try to attain the most benefit to serve our needs
• try to maximise our utility
• place an arbitrary value to each option in the mix
• select the one which benefits us the most
2 DECISION-MAKING: utility theory
• Von Neumann and Morgenstern had a formula for the utility theory:
• Outcome probability × Outcome utility = Expected utility
• criticised on the grounds of not being representative of how we normally
make our decisions. We rarely estimate objective probabilities when deciding
on an option but instead we use subjective probabilities. Most people find the
concept of probability difficult to understand, let alone being able to view
options collectively and calculate the probabilities of compound options

• we don’t always make the right choices especially when calculating gains and
losses
2.1 DECISION-MAKING: Prospect theory
• shows how people react differently based on risk and uncertainty

•  investors value gains and losses differently

•  also known as the loss-aversion theory

• individuals would rather avoid loses than similar gains – because losses create a
stronger emotional effect than gains
• imagine gaining Php1,000 then losing that same Php1,000.
• Which causes a greater emotional reaction?
• We tend to place a greater value on avoiding losses due to the associated negative emotional
impact
• fear of losses is greater than the joy of gains

• Generally, we would prefer to accept a small gain over a larger one if this is a
certainty.
2.2 DECISION-MAKING: Emotional
influences
• other aspects to decision-making that play an important role: emotions

• Omission bias is the preference for harm caused by omissions over

equal or lesser harm caused by acts.
• Ritov and Baron (1990) used vaccination to illustrate the bias: many
people consider the risk of harm from vaccination as more serious than
the risk from omitting vaccination.

• tendency to judge harmful actions as worse than harmful inactions, even

if they result in similar consequences

• tendency to favor an act of omission (inaction) over one of commission

(action)
2 DECISION-MAKING: Emotional
influences
• Status quo bias

• occurs when people are reluctant to change a situation even when

there are no costs incurred for doing so.

• More regrets occurred when people decided to change a situation

that went wrong afterwards than was the case for maintaining the
status quo (even if it were a mistake to do so)

• an emotional bias - a preference for the current state of affairs.

The current baseline is taken as a reference point, and any change
from that baseline is perceived as a loss
2.3 DECISION-MAKING: Influence of Selective Exposure
• why we often make poor decisions: selective exposure

• we make decisions based on our beliefs. We adhere to these beliefs

even when presented with information to the contrary; we continue
to use them in our decision-making

• we feel the need to defend our belief system by virtue of the

decisions we make

• we find confirmatory information

2.4 DECISION-MAKING: Naturalistic decision-making (NDM)
• model consists of five-phases to account for how we make decisions
about everyday real-life situations
2 Decision Making
• making decisions can be difficult

• have a tendency to make biased decisions

• due to the fact that we retrieve information about past experiences and events
stored in long-term memory

• new information is encoded and compared within a context of pre-existing decisions

• we often make decisions that maintain the status quo due to selective exposure

• Decisions we make are often appropriate to our needs, but they are by no means
perfect

• decisions we make on a daily basis are often bounded by informal reasoning based
on our knowledge and experiential learning
3 INFORMAL REASONING
• Reasoning used on an everyday basis is
more likely to be informal rather than the
more stringent, logically based, deductive
thinking

• has its roots in our knowledge base and our

personal experiences

• referred to as critical thinking which is a

sub-set of logic

• When presented with an argument or

statement, we informally reason that the
statement, for instance, is probably true or
probably false.

• we deal with likelihoods rather than

certainties
3 INFORMAL REASONING
• ‘slippery slope’ argument - used to account for how low-level deviant
behaviour can escalate into something more
• Stealing from grandmother’s purse is the beginning of the slippery slope to a
life of crime
• Regardless of problems associated with informal thinking, it is used
more readily in everyday situations than formal thinking such as
inductive and deductive reasoning
4 INDUCTIVE REASONING
• Helps generate new ideas based on empirical observations

• application of specific cases (or information) to general principles

• have the tendency to want to maintain our opinions and hypotheses while
discrediting those entertained by others; which is achieved through selective
exposure

• in everyday life, inductive reasoning is probably more akin to creativity than

to reasoning

• Using thought experiments engages us in thinking ‘outside the box’ by

allowing us to imagine ‘what if’ scenarios. Thought experiments enable us to
be creative and use inductive reasoning without having to actually test ideas
5 DEDUCTIVE REASONING
• formal thinking, a form of logic

• top-down thinking due to there being a general idea that reaches one
possible conclusion

• movement from general to specific premises leading to a logical conclusion

• Propositional (conditional)
• Syllogistic

• People find it difficult to do deductive reasoning, perhaps because it is

generally not the type of problem-solving required in daily life.

• Having to decide the validity of the ‘if P then Q’ problem doesn’t come
naturally.
5 DEDUCTIVE REASONING: Propositional
• two logical argument constructions: modus ponens and modus tollens
• Modus ponens is Latin for ‘method of affirming’
• P therefore Q
• ‘If it is sunny, then Mary gets sunburnt,
• It is sunny.
• Then Mary gets sunburnt’.

• modus tollens refers to ‘method of denying’.

• ‘if P, then Q. If it is a wheelbarrow, then it has a wheel.
• Not Q. It does not have a wheel.
• Therefore, not P’. Then it is not a wheelbarrow.
5 DEDUCTIVE REASONING: Syllogistic
• a kind of logical argument that applies deductive reasoning to arrive
at a conclusion based on two propositions that are asserted or
assumed to be true
• All men are mortal.
• Socrates is a man.
• Socrates is mortal.

• All adults own dogs.

• All males are adults.
• Therefore, all males own dogs.
INDUCTIVE vs DEDUCTIVE
INDUCTIVE vs DEDUCTIVE
INDUCTIVE vs DEDUCTIVE
6 PROBLEM-SOLVING
• We are presented with different types of problems to solve on a daily basis

• most problems are familiar and can be resolved by referring to similar

experiences, some are more challenging

• Problems can be classified as well-defined or ill-defined

• A well-defined problem has all the information that is needed to resolve it

encapsulated in its presentation. This means all the information is there and
we just have to use it to resolve the problem.

• Well-defined problems tend to be ‘knowledge-lean’, simply because

information is inherent in the presentation; hence, there is no need to
search our memory for information.
6 PROBLEM-SOLVING
• ill-defined problem where information required to solve it is drawn from
both knowledge and experience.

• Such problems are ‘knowledge-rich’ as they rely on additional information to

find a solution.

• these problems require the introduction of benchmarks or reference point

to help define how and which direction the solution should take

• Solutions are not always immediate, so we often adopt a trial and error
approach.

• Different hypotheses are tried and tested by performing activities to see

what works.
6 PROBLEM-SOLVING: Gestalt school of thought
• differentiated between reproductive and productive thought.

• Reproductive thought relied on the recycling of existing knowledge; doing things the
same way because it worked previously.
• Productive thought involved the reformulation of the problem in a novel way. This,
the Gestaltists argued, is like thinking laterally or ‘outside of the box’.
• Insight is considered to be a way of resolving a challenging problem that is new and
requires a different outlook.
• found that sleep aided the solution of challenging problems
• sleeping on a problem was a good way of encouraging a fresh look at the problem.
• difficult to dispel the ways we consider a problem and we can become stuck in a loop.
• Sleep helps to break the cycle by forgetting the ways the problem had been thought about.
6 PROBLEM-SOLVING: Gestalt school of thought
• Insight does not occur readily.
• Gestaltists argued that this is a consequence of how our past experiences
interfere with our mind-set
• Functional fixedness - past experiences interfere with our mind-set
and our beliefs about the function of objects

• The drawback for applying the same set strategies to different types
of problem, is that they may be inappropriate – and yet we still use
them.
6 PROBLEM-SOLVING: Information-
processing
• our limitations in problem-solving stem from a limited memory capacity
and cognitive processing based on a step-by-step (serial) approach

• introduced the notion of a problem space whereby the initial state is

the starting point and the goal state defines the problem closure.

• In between these two states are the moves that are necessary for
success

• Tower of Hanoi: smallest number of moves is actually 31, but most

people, take many more moves. This is because we tend to use
heuristics given the limitations of our information processing
capabilities rather than algorithms
PROBLEM-SOLVING HEURISTICS
• Although the use of an algorithm will guarantee a solution to a
problem, it is generally slower and more effortful than applying a
heuristic
• using an algorithm to find a painting by Monet (such as checking every
painting in turn) will help eventually locate it in the art gallery, but this might
not be the most effective way of finding it. Instead by using a heuristic,
containing general knowledge about types of painting styles, looking in the
impressionist section will lead to a painting by Monet more quickly

1. means-end analysis is an effective heuristic

• problem is broken down by the solver into the ultimate goal and the current
situation. The intermediary stages are then thought through
PROBLEM-SOLVING HEURISTICS
2. working-forward approach involves trying to solve a problem
holistically from start to finish
3. working-backward, the solver takes account of the end point and
tracks backwards to the starting position.
• For example, one’s flight leaves at 10 a.m., so the aim is to work out what
time one needs to arrive at the airport, catch the train, get to the train station
and leave the house

4. generate-and-test heuristic involves devising different courses of

action and deciding for each course whether it can solve the problem.
• For example, if the route from A to B works then this is used. If not, then a
different one is generated
PROBLEM-SOLVING HEURISTICS
5. heuristic of progress monitoring –
evaluate our progress towards our goal
monitor how well we are progressing towards our goal
change tactics if this progress is too slow

6. planning as a type of heuristic, but claimed we only use planning to

solve problems modestly given our limited short-term memory capacity

• Paynter, Kotovsky and Reder (2010): many of our problem-solving

processes occur subconsciously - different pattern of ERPs between
correct and incorrect moves. subconscious learning occurs
independently of any deliberate planning
An event-related potential (ERP) is the measured
brain response that is the direct result of a
specific sensory, cognitive, or motor event
6 PROBLEM-SOLVING: Experience and knowledge
• experience and knowledge shape how we understand our immediate
environment and the objects therein

• enables us to make comparisons across objects in everyday events. By

doing this we are making analogies.

• Making analogies across events, such as the new with the old, helps
to process information quickly without too much demand on our
processing capacity
6 PROBLEM-SOLVING: Experience and knowledge
• changes take place in the brain as new information is acquired

• changes incurred at both structural and neurological levels (i.e. the

synaptic landscape). The synaptic landscape of the brain changes as
we learn and shows plasticity
• Plasticity: “changes in structure and function of the brain that affect
behaviour and that are related to experience or training”

• Despite research showing changes to brain structure after learning

and training, what is actually changing is still speculative