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Intuitive Decision Making

Naturalistic Decision Making

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

http://goo.gl/forms/34bSN8MWLe

QUIZ 1
IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Decision making
Rational choice strategy
Articulate the problem
Develop and identify the set of options, choices
Identify ways of evaluating them
Weigh each evaluation dimension
Rate each parameter
Pick the option with the highest score (expected value)

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

I dont take decisions, I dont remember


when Ive ever made a decision.
- Fireground Commander, Gary Kleins research
* Gary Klein, research scientist in cognitive psychology of decision making
IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Naturalistic Decision Making


NDM framework studies decision making in natural settings
Focus on cognitive functions
Situational awareness
Sense making
Decision making

Observed in situations that require high levels of expertise


Difficult to replicate in lab experiments
Studied in field research in live settings

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Recognition Primed Decision Making (RPD)*


Under time pressure and uncertainty fireground commanders
Do not generate decision options
See a situation as an example of a prototype
Know the typical course of action
If expectancies of observed situation does not match
prototypical pattern.

Re-examine the situation in new context by feature matching,


story building

If conceived action does not seem workable

Evaluate another course of action


Use imagination, mental simulation to generate next course of
action

* Gary Klein
IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Examples of RPD in action


A fire-ground commander orders firemen to
leave a burning building
Infected babies
Rescue from a crashed car
Experience enables pattern recognition
Experience skillful in decision making

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Different decision strategies


Task conditions

RPD

Greater time pressure

More likely

High experience level

More likely

Dynamic conditions

More likely

Ill-defined goals

More likely

Rational Choice
Strategy

Need for justification

More likely

Conflict resolution

More likely

Optimisation

More likely

Greater computational complexity

More likely

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

How to improve decision making?


Approaches
Normative models: how it should be
Training in analytical decision strategies
Did not work well when .
Under time pressure
Factors are unclear or goals ill-defined

Heuristics and biases approach


Useful but difficult to apply in all situations
People are unaware of biases
Find it difficult o control or de-bias

Naturalistic decision making


IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

Naturalistic Decision Making


High stakes decisions are taken by experienced experts
Reasonable courses of actions as first ones considered
Workable solution rather than optimum choice
Assessing situation more important than comparing alternatives
Emphasis on context rather than technique
Baggage screening at airports
ATC decisions in averting mid-air collisions
Klein: RPD framework better explains how experts make decisions
in naturalistic settings
They use intuition

Intuition is fuelled by experience


IIMC PGPEX 2015-16

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Decision Skills Training 1

Teaching people to think like experts

IIMC PGPEX 2015-16

Recognising patterns situation awareness


Making fine perceptual discriminations
Recognising typicality, detecting anomalies
Mentally simulating future states (to evaluate courses of
action)
The overpass rescue
Improvising
Adapting to events
Teaching them cues from observed phenomena and
how to interpret them
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Decision Skills Training 2

Teaching people to learn like experts

Engaging in deliberate practice goal and evaluation

Attentional control exercises flexibly scanning situations

Sampling alternative task strategies experience bank

Obtaining feedback accurate, diagnostic and timely

Reviewing prior experiences for insight and lessons

Building mental models chess masters


Obtaining coaching

IIMC PGPEX 2015-16

Reflection chess masters

For discipline, practice schedules, feedback, spotting


weaknesses, etc.
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Salient points
Rational choice
Time pressure and
uncertainty are less
Optimum choice is
important
Conflict resolution
Need to reconcile needs
of different constituencies
Data available and
situation allows analysis

Naturalistic decisions

Extreme time pressure


Lack of data
Uncertain outcomes
Ill-defined goals
Difficult to compare
alternatives

Rational choice strategy and naturalistic decision making both necessary


IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

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Identifying, overcoming pitfalls


Pitfalls are difficult to identify. Why?
Social disapproval of negativity hinders exploration of
causes of failure.
Solution?
The Pre-mortem approach (Klein)
Imagine (a time in future) the project has failed
Consciously, explicitly look for causes

Ask a non-votary to undertake a study of what can go wrong


Especially suitable for group decisions
IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

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HB & NDM Approaches


HB

NDM

Focuses on errors
Intuition simplifies
decision making
Experience does not
assure sound
judgement

Study of successes
Experience expertise
skilled intuition
Better judgement

Applies well to high


validity situation

In low validity situation

IIMC PGPEX 2015-16

Intuitive Decision Making, Lecture 8

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Role of managers a few questions


Is a senior manager of finance good judge of the
firms stock price / valuation?
Are shop floor workers/supervisors the right people to
fix an assembly problem?
Was Rob Halls expertise one of high validity in
predicting weather on Everest?
Is an experienced income tax Assessment Officer
more likely to sniff out tax evasion from a return? Is it
because she is using RPD?
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Read (in course outline):


The Big Idea: Before You Make That Big Decision
byDaniel Kahneman,Dan Lovallo, andOlivier
Sibony, HBR, June 2011.

IIMC PGPEX 2015-16

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Questions?
What kind of strategy do you use when buying a car
or house?
Choice of decision strategy in market entry
problems?
How often do managers use RPD in NDM situations?
What type of thinking do you use in NDM?
System 1? System 2? Or 1 & 2 together.

IIMC PGPEX 2015-16

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The intuitive mind is a sacred gift and the


rational mind is a faithful servant. We have
created a society that honors the servant and
has forgotten the gift.
- Albert Einstein
IIMC PGPEX 2015-16

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