Chapter

24 Judgment and Decision Making

Experimental Psychology

VIII. THOUGHT PROCESSES

  1. Adele Diederich PhD1,
  2. Jerome R. Busemeyer PhD2

Published Online: 26 SEP 2012

DOI: 10.1002/9781118133880.hop204024

Handbook of Psychology, Second Edition

Handbook of Psychology, Second Edition

How to Cite

Diederich, A. and Busemeyer, J. R. 2012. Judgment and Decision Making. Handbook of Psychology, Second Edition. 4:VIII:24.

Author Information

  1. 1

    Jacobs University, School of Humanities and Social Sciences, Bremen, Germany

  2. 2

    Indiana University, Department of Psychological and Brain Sciences, Bloomington, IN

Publication History

  1. Published Online: 26 SEP 2012

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.

Keywords:

  • heuristics;
  • biases;
  • risk;
  • multi-attribute;
  • experienced based;
  • dynamic