Introductory description

People’s everyday lives are full of predictions and choices they have to make, spanning from small tasks such as predicting if it will rain or what to have for lunch, up to potentially life-changing events such as when the next recession will be or which career path to pursue. This module will provide an overview of the multidisciplinary academic field that focuses on investigating situations such as these: judgment and decision making.

One of the main foci of research in judgment and decision making is the tension between normative approaches (i.e., what a “rational” decision maker should do in a given situation) and descriptive approaches (i.e., what people actually do in these situations). What are the situations in which comply with the normative solutions and when do they deviate from them? What are the cognitive processes responsible for these deviations? How can environments be designed to improve people’s decisions?

This module will tackle each of these questions and empower students with knowledge of the main theoretical approaches to extend the gained knowledge to novel situations.

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

The module will cover topics such as subjective probability, heuristics, subjective utility, preferences, decision making under risk and uncertainty, intertemporal choices, influences of attention and memory on decision making, or multi-alternative choice.

Learning outcomes

By the end of the module, students should be able to:

• recognise predictable judgment and decision traps, understand why they occur, and how to counteract them
• achieve superior results in a variety of environments, including those that entail risk and uncertainty
• understand contemporary research in judgment and decision making
• apply major theoretical models to common judgment problems in real life

Indicative reading list

"Thinking, fast and slow" by Daniel Kahneman
"Judgment and Decision Making" by Baruch Fischhoff

Research element

Students will obtain a comprehensive understanding of the relationship between theoretical approaches and the experimental investigations designed to test them. Through engaging with lectures and discussions, they will develop the ability to critically evaluate the theories and the experiments, and comprehend their strengths and limitations. They will also be encouraged to design their own experiments, building upon previous research and thereby deepening their understanding of various research methods. Moreover, they will be exposed to the latest developments and advancements in the field, thereby gaining an appreciation of the key topics of behavioral science.

Interdisciplinary

The course will focus primarily on research in psychology and economics, but it will also integrate insights from other disciplines such as cognitive science, computer science, and neuroscience. Through this interdisciplinary approach, students will gain a deeper understanding of the similarities and differences between disciplinary approaches. This broader perspective will provide them with a more comprehensive and nuanced understanding of the subject matter and the complex nature of human behavior.

Subject specific skills

Students will obtain the skills necessary to understand psychological and economic theories of judgment and decision making and the differences between them. They will learn to evaluate and critically analyse behavioural experiments in this field, which will allow them to comprehend the strengths and limitations of empirical evidence, and assess the validity of their conclusions. Furthermore, they will be able to analyse and evaluate risky and uncertain prospects in the financial domain while gaining an understanding of the role psychological factors, such as attention, memory, and emotions, play in these processes.

Transferable skills

The course will provide students with valuable transferable skills, including critical thinking, problem-solving, statistical literacy, and mathematical reasoning. Moreover, through learning to articulate concepts and theories, they will enhance their written and verbal communication skills. By participating in group discussions and projects, students will also gain the ability to collaborate effectively with others. The knowledge and skills obtained will serve students well in their future endeavors, as they will be equipped to tackle complex problems and make informed decisions.