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Social Cognition
How We Think About The Social World
Lesson 03
Part I
What is Social Cognition?
• “Social cognition is:
– how people think about the social world and themselves
– or more specifically how people
➢ select,
➢ interpret,
➢ remember
➢ and use
– social information to make judgments and decisions.”((Berkowitz
& Devine, 1995))
• It focuses on the role that cognitive processes play in our social
interactions.
• The way we think about others plays a major role in how we think,
feel, and interact with the world around us.
• That is, its’ focus is on an analysis of how information is processed,
stored, represented in memory, and subsequently used in perceiving
and interacting with the social world.
For example:
• Imagine that you are getting ready to go for interview.
• Not only do you worry about the impression and signals that
you are sending to the other person, you are also concerned
with interpreting the signals given by the other individual.
• How do you form an impression of this person?
• What meaning do you read into the other person's behavior?
• This is just one example of how social cognition influences a
single social interaction, but you can probably think of many
more examples from your daily life.
• We spend a considerable portion of every day interacting
with others-----which is why an entire branch of psychology
formed to help understand how we feel, think, and interact
with the world around us.
Assumptions Of Social Cognition
• Assumptions of social cognition is that:
– People are generally trying to form accurate impressions
of the world and do so much of the time.
– Because of the nature of social thinking, however, people
sometimes form erroneous impressions.
• Often the information available to us is
– incomplete,
– ambiguous
– or contradictory.
• Social cognition focuses on:
– the way we use this information to arrive at coherent
judgments.
Two Kinds/Modes Of Social Thought
Two modes of social thought (Cont’d)
❑ Quick/Automatic Thinking/Processing
• Quickly, effortlessly and without lots of careful
reasoning or logic.
• Thinking, that is,
✓ unconscious,
✓ unintentional,
✓ involuntary,
✓ and effortless,
✓ that is, low effort thinking.
• Humans also have automatic pilots like airplane that
monitors their environment, draw conclusions and direct
their behavior.
Two modes of social thought (Cont’d)
❑ Controlled Thinking/Processing
• Thinking that is,
✓ Careful,
✓ Logical,
✓ Systematic,
✓ effortful
✓ and deliberate.
• In this kind of processing, individuals think systematically and
logically to reach to a conclusion
• Controlled processing tends to occur when:
— A situation is important to us, or
— When something unexpected happens.
• Pausing to think about self and environment and carefully selecting
the right course of action.
For Example:
• when you want to make a travel plan for your holidays, you find out
most of the information, carefully choose the destinations and then
systematically make the travel plans
• which college/university to go? which major to pursue?
Components Of Social Cognition
• Firstly
– the Schemas
• Secondly
– Heuristics
• Thirdly
– How social cognition influences Affect and
vice versa.
The Schemas: Mental framework for organizing and
using social information.
Definition
• “Mental framework built around a specific theme or subject.”
• “Mental structure/framework:
– people use to organize their knowledge (information)
about the social world around themes or subjects (about
people, ourselves, social roles, specific events.”
• We have schemas about ourselves, other people, mechanical
devices, food, and in fact almost everything
Example
• What happens when you visit your doctor?
– You enter and sign in.
– Then you sit and wait.
– If lucky, the wait is no long and nurse takes you into an
examining room.
– Once there, you wait some more, eventually doctor enters,
talks to you about how you are feeling and examines you.
– Finally, you leave and perhaps pay your bill.
– The sequence of events will takes place like this.
– None of this will surprise you.
• Why?
• Because through past experience you have built a mental
structure or framework for this kind of situation, that is,
visiting a doctor.
• Similarly, you have other mental structures or frameworks for:
– Going to restaurants.
– Working in the library.
– Shopping for groceries.
– Going for interviews.
– Being in family gathering, or
– Any other normal life routine situation.
• You may also have mental structures or frameworks for:
– People.
– Occupations.
– Social rules.
– Specific social groups, and
– Many other aspects of the social world.
• In each case, your experience has allowed you to build up a
mental structure that helps us:
– to organize social information and that guide the processing
of such information
Types Of Schemas
i. Person Schema
• Expectations based on personality traits (Beliefs about personality
types).
• For example, introvert, extrovert, outstanding leader, warm person.
• Behaviors that characterize person-types
➢ Extroverts are outgoing and friendly Extroverts go to big parties
➢ Introverts are quite and shy Introverts go to small gatherings
Function: Help people draw inferences about others.
ii. Role Schema
• Role schemas are about proper behaviors in given situations.
Expectations about people in particular roles.
• Norms and expectations about particular roles in society
➢ Waitresses take food orders
➢ Doctors cure the ill
➢ Schema for a housewife may include taking utmost care of household
activities and shouldering the responsibility of nurturing the children
• For example, role of a doctor, student, teacher, janitors, etc.
Function: Help people draw inferences
Types of Schemas (Cont’d)
iii.Event Schema
• Event schemas are also known as “scripts”.
• It is about what happens in specific situations.
• Expectations about sequences of events in social situations.
• For example, concert, lecture, festivals(Eid), wedding,
funerals, graduations, job interviews, etc.
iv. Group Schema
• Group schemas are also called “stereotypes”.
• A fix set of characteristics that are attributed to the
members of a particular social group or social category.
• For example, politicians, lawyers, societal welfare groups,
religious groups, gender oriented groups, etc.
The Impact Of Schemas On Social Cognition
Schemas influence social thoughts through
three basic processes:
❑ Attention
❑ Encoding
❑ Retrieval
❑ Attention
• Attention refers to what information we notice.
• The process of focusing on features of the environment or
oneself.
• Schemas work as mechanism that helps individuals to focus
attention on specific aspects of environment (schemas
affect what is noticed).
• Attention is limited and different people may focus on
different features of the same situation.
• With respect to attention, schemas often act as a kind of
filter, that is, information(Stimulus) consistent with
schemas is more easily noticed than the stimulus that is not
fitting with the schemas one hold (unless the information
has high strength of attracting information).
For Example:
while watching a cricket match we quickly notice happenings
on the ground as compared to the noise in the stadium
❑ Encoding
• Encoding refers to the process through which information,
we notice, gets stored in our memory (schemas affect
what is stored in memory).
• Information that is consistent with schemas is more likely
to be saved in the long-term memory than the one that is
less relevant (Information consistent with our schemas
are encoded).
• we remember easily the instances when people have
agreed with us than when they have disagreed.
• In contrast, we also remember some instances, which do
not at all fit in the schemas.
For example,
if you go to the government office and your work is done in
five minutes, most probably you will not forget the instance,
because it was contradictory to your expectations.
❑ Retrieval
• Retrieval refers to the processes through which we recover
from memory to use it in making judgments or decisions about
the social world (schemas affect what is recovered from
memory).
• The relationship between schemas and retrieval is a complex
issue.
• Some researchers have shown that information that is
consistent with schemas is better retrieved. In-fact information
inconsistent with schemas may be more easily stored and
retrieved from memory too.
For example:
schemas play an important role in prejudice(i.e Indians are
prejudiced toward Pakistanis), forming one basic component of
stereotypes about specific social groups.
• Once they are formed schemas are often very resistant to
change, they show a strong perseverance effect, remaining
unchanged even in the face of contradictory information (e.g.
Heuristics: Reducing Efforts In Social
Cognition
Information Overload
• Our cognitive systems are limited.
• Our cognitive system is capable of handling a certain amount
of information.
• Additional information beyond this level puts us into state of
“information overload”.
• Information overload is defined as “Instances in which our
ability to process information is exceeded”.
• Information Overload is a situation when the information for
processing is more than the ability of our cognitive system.
• We use smart tactics under conditions of information
overload and manage this information.
• These tactics are known as “heuristics”.
For example:
– Several countries have thought about banning talking
on cell phones during driving because it causes a lot of
accidents.
– Talking on cell phones during driving are highly
distracting.
– Drivers talk on the phone or pay attention to a GPS
while driving in heavy traffic make their capacity
limited to process information and enter into a state
of information overload thus, causing serious
accidents.
– To avoid this we make use of heuristics.
Definition of Heuristics
• Mental shortcuts for making decisions, helps to reduce
information overload.
❑ “Rules or principles that allow people to make social
inferences rapidly and with reduced efforts.”
❑ “Heuristics are rules of thumb or mental shortcuts that
people use to make decisions and draw inferences rapidly
and with reduced efforts when the cognitive system is
overloaded with information”.
• Heuristics is also called “Judgmental heuristics”.
• Heuristics may help us in making correct judgments.
When do we use Heuristics?
• Lack of time for full processing.
• Information overload.
• When issues are not important.
• When we have little solid information to
use in decision making
Types Of Heuristics
Representative heuristics
Availability heuristics
Anchoring and adjustment
heuristics
Representative Heuristics
• Representative heuristics means “judging by resemblance”.
• A mental shortcut whereby people classify something
according to how similar it is to a typical case.
• Representative heuristics suggests that the more similar an
individual is to typical members of a given group, the more
likely he/she belongs to that group.
• E.g. Ali is a lawyer because he looks like a typical lawyer.
Example
• Kara is attractive, fun-loving, enjoys tanning and attending
rock concerts.
• When people were asked whether she was a teacher or a
model – most say model.
• Even though there are far more females teachers than models.
• People picked model, because she meets that prototype
(sample).
For example:
• Ali is a lawyer because he looks like a typical lawyer.
• You met a next door neighbor for the first time. While chatting you
observed:
• She is dressed conservatively.
• She is very neat in her personal habit.
• She has a large library in her home, and
• She seems to be little gentle and shy.
• Later you realized that she did not mention what she did for
living? You assume:
• Is she a physician?
• A business manager?
• A waitress?
• An attorney?
• A dancer?
• A librarian?
One quick way of making a guess is to compare her with other
Base rate Fallacy
• The use of this heuristic can systematically lead to make errors in
judgments.
• One such example is ‘base rate fallacy’.
• Ignoring statistical information (ignore or you do not understand)
in favor of using irrelevant information, that one incorrectly
believes to be relevant, to make a judgment. 
• This usually stems from the irrational belief that statistics don’t
apply to a situation, for one reason or another when, in fact, they
do.
Example:
• Only 6% of applicants make it into this school, but my son is
brilliant!  They are certainly going to accept him!
Explanation: 
• Statistically speaking, the son may still have a low chance of
acceptance. The school is for brilliant kids (and everyone knows
Another Practical Application for Base Rate Fallacy: Give them 33%
and tell them it's 50%
• Lots of food companies exploit the Base Rate Fallacy on their
packaging. When something says "50% extra free," only a third
(33%) of what you're looking at is free.
• If you think half of what you're looking at is free, then you've
committed the Base Rate Fallacy. 
• For example:
• when you buy six cans of Coke labeled "50% extra free," only two
of the cans are free, not three. (It's because the original pack had
four cans, and 50% of the original amount is two cans.) 
If you thought three of the cans were free, then you failed to
account for an earlier premise (i.e., there were four cans originally),
and you committed the Base Rate Fallacy.
Availability Heuristics
• If I think of it, it must be important.
• Availability heuristics means judging by memory availability.
• Basing judgments on how easy things come to mind.
• Availability heuristics is defined as judging by how quickly
examples come to mind.
• “Availability Heuristics refers to the strategy of making
judgments of an event on the basis of how easily specific type of
information can be easily brought to mind.”
• Availability is a cognitive heuristic in which a decision maker relies
upon knowledge that is readily available in his mind rather than
examine or go through the details and statistics.
• For example:
• People are over estimating the divorce rates, if they can quickly
find examples of divorced friends.
• One may assess the risk of heart attack among middle-aged
people by recalling such occurrences among one's acquaintances.
• Think of examples of letters that starts with “K”. It is more
common to think.
• Now, think of examples with “K” as third letter of the word.
Examples of Availability Heuristics
• After seeing news reports about people losing their jobs, you
might start to believe that you are in danger of being layed-
off. You start lying awake in bed each night worrying that
you are about to be fired.
• After seeing several television programs on shark attacks,
you start to think that such incidences are relatively common.
When you go on vacation, you refuse to swim in the ocean
because you believe the probability of a shark attack is high.
• After reading an article about lottery winners, you start to
overestimate your own likelihood of winning the jackpot. You
start spending more money than you should each week on
lottery tickets.
• After seeing news stories about high-profile child abductions,
you begin to believe that such tragedies are quite common.
You refuse to let your child play outside by herself and
never let her leave your sight.
Anchoring And Adjustment Heuristics
• A mental shortcut whereby people use a number or value
as a starting point and then adjust insufficiently from this
anchor.
• Anchoring and adjustment heuristics selects a reference
value to make an estimate and then revises upward or
downward to reach a conclusion.
For example:
A seller advertised in paper for selling its car. The price in the
paper was higher than the seller really hoped to get and that
is common practice.
Why?
Because sellers want to give themselves some room for
bargaining.
Often the selling point is the starting point (anchor) for
discussions, the buyer offers less and the seller counters and
the process continues until an agreement is reached or the
buyer gives up.
For example:
In one of the experiments, Kahneman and Tversky asked students
to guess the percentage of African nations which are members of
the United Nations.
One group of students were first asked "Was it more or less than
45%?" whereas
Other group of students were asked "Was it more or less than
65%?"
The first group of students guessed lower values than the second
group. This is because of the use of Anchoring and Adjustment
heuristics.
The initial question set the high (65%) or low (45%) as an anchor.
Then individuals made adjustment around that anchor and gave
answers around anchor.
So individuals under high anchor condition judged the percentage
of African nations much higher than those who are in low anchor
condition.
Similar pattern of answers have been found for other kinds of
estimates.
• For instance, when meeting a new person, your
first impression forms an anchor of that person,
and you may not process subsequent information
about that person as fully as it should be
processed
Base Rate Fallacy Defined
• Over half of car accidents occur within five miles of home, according to a
report by Progressive Insurance in 2002.
• You may recall having heard this statistic before, or something similar, and
being surprised.
• After all, it takes only minutes of driving to travel five miles from home.
• How could an accident occur so quickly?
• However, if you think through this statistic a little further, it's really not
so shocking after all.
• How often do you drive more than five miles from home? If you are like
most of us, it's not an everyday occurrence.
• It's no wonder most of our car accidents occur within five miles of home;
that's where most of our driving occurs.
• This example illustrates a very common error in judgment. 
• Base rate fallacy occurs when a person misjudges the likelihood of an event
because he or she doesn't take into account other relevant base rate
information.
• What do we mean by relevant base rate information? Well, base
rate concerns the likelihood of an event occurring out there in the world
regardless of what the conditions of a particular situation may be.
• So, the base rate of being a Christian is 1 in 3 people. The
base rate of Americans adults who own cell phones is 9 out
of every 10 American adults. We could find the base rate
of other things, such as the likelihood of a building having
a 13th floor, or the likelihood of a dog being a Labrador.
Why it Occurs
• Anytime a certain event occurs, such as a car accident
within five miles from home, we can come up with an idea
of how likely that event was given relevant base rate
information.
• Relevant base rate information in this case would be things
like the likelihood to be within five miles from home when
driving, the likelihood of getting into a car accident at all,
the likelihood of driving during a particular day of the
week or time of day, and so on.
• However, base rate fallacy occurs because people tend to
ignore all of this relevant base rate information and
instead rely on mental shortcuts, such as the idea that a
car accident occurs when we do a lot of driving, rather
than during a quick trip to the local grocery store.

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Social Cognition How We Think About The Social World

  • 1. Social Cognition How We Think About The Social World Lesson 03 Part I
  • 2. What is Social Cognition? • “Social cognition is: – how people think about the social world and themselves – or more specifically how people ➢ select, ➢ interpret, ➢ remember ➢ and use – social information to make judgments and decisions.”((Berkowitz & Devine, 1995)) • It focuses on the role that cognitive processes play in our social interactions. • The way we think about others plays a major role in how we think, feel, and interact with the world around us. • That is, its’ focus is on an analysis of how information is processed, stored, represented in memory, and subsequently used in perceiving and interacting with the social world.
  • 3. For example: • Imagine that you are getting ready to go for interview. • Not only do you worry about the impression and signals that you are sending to the other person, you are also concerned with interpreting the signals given by the other individual. • How do you form an impression of this person? • What meaning do you read into the other person's behavior? • This is just one example of how social cognition influences a single social interaction, but you can probably think of many more examples from your daily life. • We spend a considerable portion of every day interacting with others-----which is why an entire branch of psychology formed to help understand how we feel, think, and interact with the world around us.
  • 4. Assumptions Of Social Cognition • Assumptions of social cognition is that: – People are generally trying to form accurate impressions of the world and do so much of the time. – Because of the nature of social thinking, however, people sometimes form erroneous impressions. • Often the information available to us is – incomplete, – ambiguous – or contradictory. • Social cognition focuses on: – the way we use this information to arrive at coherent judgments.
  • 5. Two Kinds/Modes Of Social Thought
  • 6. Two modes of social thought (Cont’d) ❑ Quick/Automatic Thinking/Processing • Quickly, effortlessly and without lots of careful reasoning or logic. • Thinking, that is, ✓ unconscious, ✓ unintentional, ✓ involuntary, ✓ and effortless, ✓ that is, low effort thinking. • Humans also have automatic pilots like airplane that monitors their environment, draw conclusions and direct their behavior.
  • 7. Two modes of social thought (Cont’d) ❑ Controlled Thinking/Processing • Thinking that is, ✓ Careful, ✓ Logical, ✓ Systematic, ✓ effortful ✓ and deliberate. • In this kind of processing, individuals think systematically and logically to reach to a conclusion • Controlled processing tends to occur when: — A situation is important to us, or — When something unexpected happens. • Pausing to think about self and environment and carefully selecting the right course of action. For Example: • when you want to make a travel plan for your holidays, you find out most of the information, carefully choose the destinations and then systematically make the travel plans • which college/university to go? which major to pursue?
  • 8. Components Of Social Cognition • Firstly – the Schemas • Secondly – Heuristics • Thirdly – How social cognition influences Affect and vice versa.
  • 9. The Schemas: Mental framework for organizing and using social information. Definition • “Mental framework built around a specific theme or subject.” • “Mental structure/framework: – people use to organize their knowledge (information) about the social world around themes or subjects (about people, ourselves, social roles, specific events.” • We have schemas about ourselves, other people, mechanical devices, food, and in fact almost everything
  • 10. Example • What happens when you visit your doctor? – You enter and sign in. – Then you sit and wait. – If lucky, the wait is no long and nurse takes you into an examining room. – Once there, you wait some more, eventually doctor enters, talks to you about how you are feeling and examines you. – Finally, you leave and perhaps pay your bill. – The sequence of events will takes place like this. – None of this will surprise you. • Why? • Because through past experience you have built a mental structure or framework for this kind of situation, that is, visiting a doctor.
  • 11. • Similarly, you have other mental structures or frameworks for: – Going to restaurants. – Working in the library. – Shopping for groceries. – Going for interviews. – Being in family gathering, or – Any other normal life routine situation. • You may also have mental structures or frameworks for: – People. – Occupations. – Social rules. – Specific social groups, and – Many other aspects of the social world. • In each case, your experience has allowed you to build up a mental structure that helps us: – to organize social information and that guide the processing of such information
  • 12. Types Of Schemas i. Person Schema • Expectations based on personality traits (Beliefs about personality types). • For example, introvert, extrovert, outstanding leader, warm person. • Behaviors that characterize person-types ➢ Extroverts are outgoing and friendly Extroverts go to big parties ➢ Introverts are quite and shy Introverts go to small gatherings Function: Help people draw inferences about others. ii. Role Schema • Role schemas are about proper behaviors in given situations. Expectations about people in particular roles. • Norms and expectations about particular roles in society ➢ Waitresses take food orders ➢ Doctors cure the ill ➢ Schema for a housewife may include taking utmost care of household activities and shouldering the responsibility of nurturing the children • For example, role of a doctor, student, teacher, janitors, etc. Function: Help people draw inferences
  • 13. Types of Schemas (Cont’d) iii.Event Schema • Event schemas are also known as “scripts”. • It is about what happens in specific situations. • Expectations about sequences of events in social situations. • For example, concert, lecture, festivals(Eid), wedding, funerals, graduations, job interviews, etc. iv. Group Schema • Group schemas are also called “stereotypes”. • A fix set of characteristics that are attributed to the members of a particular social group or social category. • For example, politicians, lawyers, societal welfare groups, religious groups, gender oriented groups, etc.
  • 14. The Impact Of Schemas On Social Cognition Schemas influence social thoughts through three basic processes: ❑ Attention ❑ Encoding ❑ Retrieval
  • 15. ❑ Attention • Attention refers to what information we notice. • The process of focusing on features of the environment or oneself. • Schemas work as mechanism that helps individuals to focus attention on specific aspects of environment (schemas affect what is noticed). • Attention is limited and different people may focus on different features of the same situation. • With respect to attention, schemas often act as a kind of filter, that is, information(Stimulus) consistent with schemas is more easily noticed than the stimulus that is not fitting with the schemas one hold (unless the information has high strength of attracting information). For Example: while watching a cricket match we quickly notice happenings on the ground as compared to the noise in the stadium
  • 16. ❑ Encoding • Encoding refers to the process through which information, we notice, gets stored in our memory (schemas affect what is stored in memory). • Information that is consistent with schemas is more likely to be saved in the long-term memory than the one that is less relevant (Information consistent with our schemas are encoded). • we remember easily the instances when people have agreed with us than when they have disagreed. • In contrast, we also remember some instances, which do not at all fit in the schemas. For example, if you go to the government office and your work is done in five minutes, most probably you will not forget the instance, because it was contradictory to your expectations.
  • 17. ❑ Retrieval • Retrieval refers to the processes through which we recover from memory to use it in making judgments or decisions about the social world (schemas affect what is recovered from memory). • The relationship between schemas and retrieval is a complex issue. • Some researchers have shown that information that is consistent with schemas is better retrieved. In-fact information inconsistent with schemas may be more easily stored and retrieved from memory too. For example: schemas play an important role in prejudice(i.e Indians are prejudiced toward Pakistanis), forming one basic component of stereotypes about specific social groups. • Once they are formed schemas are often very resistant to change, they show a strong perseverance effect, remaining unchanged even in the face of contradictory information (e.g.
  • 18. Heuristics: Reducing Efforts In Social Cognition Information Overload • Our cognitive systems are limited. • Our cognitive system is capable of handling a certain amount of information. • Additional information beyond this level puts us into state of “information overload”. • Information overload is defined as “Instances in which our ability to process information is exceeded”. • Information Overload is a situation when the information for processing is more than the ability of our cognitive system. • We use smart tactics under conditions of information overload and manage this information. • These tactics are known as “heuristics”.
  • 19. For example: – Several countries have thought about banning talking on cell phones during driving because it causes a lot of accidents. – Talking on cell phones during driving are highly distracting. – Drivers talk on the phone or pay attention to a GPS while driving in heavy traffic make their capacity limited to process information and enter into a state of information overload thus, causing serious accidents. – To avoid this we make use of heuristics.
  • 20. Definition of Heuristics • Mental shortcuts for making decisions, helps to reduce information overload. ❑ “Rules or principles that allow people to make social inferences rapidly and with reduced efforts.” ❑ “Heuristics are rules of thumb or mental shortcuts that people use to make decisions and draw inferences rapidly and with reduced efforts when the cognitive system is overloaded with information”. • Heuristics is also called “Judgmental heuristics”. • Heuristics may help us in making correct judgments.
  • 21. When do we use Heuristics? • Lack of time for full processing. • Information overload. • When issues are not important. • When we have little solid information to use in decision making
  • 22. Types Of Heuristics Representative heuristics Availability heuristics Anchoring and adjustment heuristics
  • 23. Representative Heuristics • Representative heuristics means “judging by resemblance”. • A mental shortcut whereby people classify something according to how similar it is to a typical case. • Representative heuristics suggests that the more similar an individual is to typical members of a given group, the more likely he/she belongs to that group. • E.g. Ali is a lawyer because he looks like a typical lawyer. Example • Kara is attractive, fun-loving, enjoys tanning and attending rock concerts. • When people were asked whether she was a teacher or a model – most say model. • Even though there are far more females teachers than models. • People picked model, because she meets that prototype (sample).
  • 24. For example: • Ali is a lawyer because he looks like a typical lawyer. • You met a next door neighbor for the first time. While chatting you observed: • She is dressed conservatively. • She is very neat in her personal habit. • She has a large library in her home, and • She seems to be little gentle and shy. • Later you realized that she did not mention what she did for living? You assume: • Is she a physician? • A business manager? • A waitress? • An attorney? • A dancer? • A librarian? One quick way of making a guess is to compare her with other
  • 25. Base rate Fallacy • The use of this heuristic can systematically lead to make errors in judgments. • One such example is ‘base rate fallacy’. • Ignoring statistical information (ignore or you do not understand) in favor of using irrelevant information, that one incorrectly believes to be relevant, to make a judgment.  • This usually stems from the irrational belief that statistics don’t apply to a situation, for one reason or another when, in fact, they do. Example: • Only 6% of applicants make it into this school, but my son is brilliant!  They are certainly going to accept him! Explanation:  • Statistically speaking, the son may still have a low chance of acceptance. The school is for brilliant kids (and everyone knows
  • 26. Another Practical Application for Base Rate Fallacy: Give them 33% and tell them it's 50% • Lots of food companies exploit the Base Rate Fallacy on their packaging. When something says "50% extra free," only a third (33%) of what you're looking at is free. • If you think half of what you're looking at is free, then you've committed the Base Rate Fallacy.  • For example: • when you buy six cans of Coke labeled "50% extra free," only two of the cans are free, not three. (It's because the original pack had four cans, and 50% of the original amount is two cans.)  If you thought three of the cans were free, then you failed to account for an earlier premise (i.e., there were four cans originally), and you committed the Base Rate Fallacy.
  • 27. Availability Heuristics • If I think of it, it must be important. • Availability heuristics means judging by memory availability. • Basing judgments on how easy things come to mind. • Availability heuristics is defined as judging by how quickly examples come to mind. • “Availability Heuristics refers to the strategy of making judgments of an event on the basis of how easily specific type of information can be easily brought to mind.” • Availability is a cognitive heuristic in which a decision maker relies upon knowledge that is readily available in his mind rather than examine or go through the details and statistics. • For example: • People are over estimating the divorce rates, if they can quickly find examples of divorced friends. • One may assess the risk of heart attack among middle-aged people by recalling such occurrences among one's acquaintances. • Think of examples of letters that starts with “K”. It is more common to think. • Now, think of examples with “K” as third letter of the word.
  • 28. Examples of Availability Heuristics • After seeing news reports about people losing their jobs, you might start to believe that you are in danger of being layed- off. You start lying awake in bed each night worrying that you are about to be fired. • After seeing several television programs on shark attacks, you start to think that such incidences are relatively common. When you go on vacation, you refuse to swim in the ocean because you believe the probability of a shark attack is high. • After reading an article about lottery winners, you start to overestimate your own likelihood of winning the jackpot. You start spending more money than you should each week on lottery tickets. • After seeing news stories about high-profile child abductions, you begin to believe that such tragedies are quite common. You refuse to let your child play outside by herself and never let her leave your sight.
  • 29. Anchoring And Adjustment Heuristics • A mental shortcut whereby people use a number or value as a starting point and then adjust insufficiently from this anchor. • Anchoring and adjustment heuristics selects a reference value to make an estimate and then revises upward or downward to reach a conclusion. For example: A seller advertised in paper for selling its car. The price in the paper was higher than the seller really hoped to get and that is common practice. Why? Because sellers want to give themselves some room for bargaining. Often the selling point is the starting point (anchor) for discussions, the buyer offers less and the seller counters and the process continues until an agreement is reached or the buyer gives up.
  • 30.
  • 31. For example: In one of the experiments, Kahneman and Tversky asked students to guess the percentage of African nations which are members of the United Nations. One group of students were first asked "Was it more or less than 45%?" whereas Other group of students were asked "Was it more or less than 65%?" The first group of students guessed lower values than the second group. This is because of the use of Anchoring and Adjustment heuristics. The initial question set the high (65%) or low (45%) as an anchor. Then individuals made adjustment around that anchor and gave answers around anchor. So individuals under high anchor condition judged the percentage of African nations much higher than those who are in low anchor condition. Similar pattern of answers have been found for other kinds of estimates.
  • 32. • For instance, when meeting a new person, your first impression forms an anchor of that person, and you may not process subsequent information about that person as fully as it should be processed
  • 33. Base Rate Fallacy Defined • Over half of car accidents occur within five miles of home, according to a report by Progressive Insurance in 2002. • You may recall having heard this statistic before, or something similar, and being surprised. • After all, it takes only minutes of driving to travel five miles from home. • How could an accident occur so quickly? • However, if you think through this statistic a little further, it's really not so shocking after all. • How often do you drive more than five miles from home? If you are like most of us, it's not an everyday occurrence. • It's no wonder most of our car accidents occur within five miles of home; that's where most of our driving occurs. • This example illustrates a very common error in judgment.  • Base rate fallacy occurs when a person misjudges the likelihood of an event because he or she doesn't take into account other relevant base rate information. • What do we mean by relevant base rate information? Well, base rate concerns the likelihood of an event occurring out there in the world regardless of what the conditions of a particular situation may be.
  • 34. • So, the base rate of being a Christian is 1 in 3 people. The base rate of Americans adults who own cell phones is 9 out of every 10 American adults. We could find the base rate of other things, such as the likelihood of a building having a 13th floor, or the likelihood of a dog being a Labrador. Why it Occurs • Anytime a certain event occurs, such as a car accident within five miles from home, we can come up with an idea of how likely that event was given relevant base rate information. • Relevant base rate information in this case would be things like the likelihood to be within five miles from home when driving, the likelihood of getting into a car accident at all, the likelihood of driving during a particular day of the week or time of day, and so on. • However, base rate fallacy occurs because people tend to ignore all of this relevant base rate information and instead rely on mental shortcuts, such as the idea that a car accident occurs when we do a lot of driving, rather than during a quick trip to the local grocery store.