ORG419 Judgement and Decision Making

Every day we make hundreds of choices. Since we all live in an uncertain world, we make many of these choices with incomplete information and without the time to fully analyse each and every possible option available to us. In this process, we typically use short-cuts or rules-of-thumb when making judgments and decisions. In many situations these short-cuts work very well and lead to good decisions. In other situations, however, they lead us to make systematic judgmental errors which result in poor decisions. Coming to understand how the short-cuts and rules-of-thumb work and how and when they lead to misjudgement can help us develop habits of thought which avoid many of the problems.

The goal of the course is to help develop habits of thought which will lead to better decisions. This is achieved by learning how to identify and avoid some common types of judgmental errors and to recognize and predict these errors. The questions that will be dealt with in the course are: 1) how should we make decisions, 2) how do we make decisions, and 3) what can

we do to improve our decision making? Amongst the many topics considered will be: probability judgment, heuristics and biases, utility measurement, judgment of correlation and contingency, risk, choice under certainty, choice under uncertainty, utilitarianism, fairness, social dilemmas, moral judgments, motivational and affective influences on decisions, and judgment about the future.

• demonstrate understanding of important normative, descriptive, and prescriptive models of judgment and decision making.
• analyse normative, descriptive, and prescriptive models of judgment and inference, with reference to their use in practice.
• identify and analyse processes of judgment, inference and choice within specific contexts and discuss the factors affecting the decision making.
• recognize irrationality in oneself and others and propose ways of improving judgments and inferences.
• understand how human behaviour is affected by design/choice architecture.
• analyse and discuss ethical and moral aspects of decision making and interventions designed to change people’s behaviour.
• design a plan for use of choice architecture that may contribute towards achieving the UN’s Sustainable Development Goals.

On successful completion of this course, students should be able to:

1. Give an overview of important normative, descriptive and prescriptive models of judgment and decision making.
2. Analyse and show a broad understanding of the normative and descriptive theories of judgment and inference with reference to their use in practice.
3. Recognising irrationality in oneself and others and propose ways of improving judgments and inferences.
4. Identify and analyse processes of judgment, inference and choice within specific contexts and discuss the factors affecting the decision making.

Lectures, class discussions, compulsory student assignments and presentations.

1. Examination requirement: Approval of student assignments and presentations.

2. Examination: 4 hour written examination (differentiated grades).

Theoretical.

Normally fourth year.