Module 2 problem solving and decision making
5. Problem-Solving Cycle
Problem-solving is a cognitive process that involves identifying a problem, developing
potential solutions, and selecting the most effective one. The problem-solving cycle
consists of the following steps:
1. Problem Identification Recognizing that a problem exists.
2. Problem Definition Understanding the nature and constraints of the problem.
3. Strategy Formulation Deciding how to approach solving the problem.
4. Organization of Information Gathering relevant data.
5. Resource Allocation Determining the time and effort to dedicate to solving the problem.
6. Monitoring Evaluating progress and adjusting strategies if needed.
7. Evaluation Assessing the effectiveness of the solution.
6. Types of Problems
Well-Structured Problems
Have clear initial and goal states.
Follow a defined set of rules or procedures to reach a solution.
Example: Solving a mathematical equation.
ill-Structured Problems
Lack clear goals, constraints, or paths to a solution.
Require creative and flexible thinking.
Example: Addressing climate change or writing an essay.
7. Obstacles in Problem-Solving
Common Barriers to Effective Problem-Solving:
1. Mental Set Relying on familiar strategies that may not be effective in a new context.
2. Functional Fixedness Inability to see alternative uses for objects.
3. Confirmation Bias Seeking information that supports existing beliefs and ignoring
contradictory evidence.
4. Unnecessary Constraints Imposing limitations that do not actually exist in the problem.
5. Lack of Problem Representation Misunderstanding or failing to frame the problem
correctly.
8. Aids to Problem-Solving
Strategies Used in Problem-Solving:
1. Trial and Error Randomly trying solutions until one works. Effective for simple
problems.
2. Heuristics Mental shortcuts or "rules of thumb" that provide quick but sometimes
inaccurate solutions.
3. Algorithms Step-by-step procedures that guarantee a correct solution if applied
correctly.
4. Forming Subgoals Breaking a large problem into smaller, manageable parts.
5. Searching for Analogies Relating the current problem to a previously solved problem.
6. Changing the Representation of the Problem Looking at the problem from different
perspectives.
9. Introduction to Decision-Making
Decision-making is a cognitive process that involves selecting the best option from
multiple alternatives. It plays a crucial role in daily life and varies in complexity, from
simple choices (e.g., selecting a meal) to complex strategic decisions (e.g., career
choices).
10. Classical Decision Theory
The Model of Economic Man and Woman
Assumes that individuals make rational decisions based on full information.
People weigh all possible options and select the one that maximizes utility.
Rooted in rational choice theory and utility theory.
Subjective Expected Utility (SEU) Theory
A mathematical model of decision-making under uncertainty.
Individuals assign probabilities and values to outcomes and choose the option with the
highest expected utility.
Example: A gambler estimating the likelihood of winning a bet.
11. Heuristics and Biases in Decision-Making
Common Heuristics in Decision-Making:
1. Availability Heuristic Judging probability based on how easily examples come to mind
(e.g., fearing plane crashes due to media coverage).
2. Representativeness Heuristic Judging based on how well something matches a
prototype (e.g., assuming someone who loves books is a librarian).
3. Anchoring and Adjustment Relying too much on the first piece of information received
when making decisions.
4. Recognition Heuristic Preferring familiar options over unknown ones.
Cognitive Biases Affecting Decision-Making:
Overconfidence Bias Overestimating one's ability to make accurate predictions.
Hindsight Bias Believing an event was predictable after it has already occurred.
Framing Effect Making different decisions based on how options are presented.
12. Fallacies in Decision-Making
Common Decision-Making Fallacies:
1. Gamblers Fallacy Belief that past random events influence future probabilities (e.g.,
expecting a coin to land on heads after several tails).
2. Sunk Cost Fallacy Continuing an endeavor due to past investments rather than future
benefits.
3. Base Rate Fallacy Ignoring general probability in favor of specific information.
