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CHAPTER 1:
Problem-Solving and
Decision-Making
Processes:
Deliberation, Intuition,
and Expertise
Layout of the Book
• Part 1: overview of problem
solving/decision making
• Part 2. Empiricism. Light on stats, more
on JDM
• Part 3. Decision making
• Part 4. Influence and group decision
making
Terminology
• Problem
–Problem solving
• Decision
–Decision making
• Judgment
The Problem Space
Navigating The Problem Space
Deliberative Method
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State, or “frame,” the problem to be solved;
Identify and prioritize the relevant values, interests and
objectives;
Identify and resolve major uncertainties concerning the
cause of the problem;
Generate a range of plausible solutions or alternative
courses of action;
Predict the consequences of the courses of action and
assess their impact on the relevant interests or
objectives.
Select the course of action that optimizes the interests or
objectives to be served (i.e., make a decision);
Implement, observe and learn from the outcome of the
decision.
Evers v. Newport Records
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Anna Wilkins, associate. Luis Trujillo partner
Represent Clyde Evers in breach of contract case
Evers sold custom accounting software to Newport
Records for $600,000.
Newport refuses to pay, saying that the software does not
do what Evers said it would do.
Evers upset that nothing had happened since the case
was filed. Asks Anna to hasten its resolution.
Wilkins:
• Contract disclaims any warranty of performance.
-> Proposes summary judgment.
Evers v. Newport Records (con’d)
Trujillo
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Judge skeptical about summary judgment.
Evers may have made extravagant oral representations. Even if not
formally binding, they may bias the judge further against summary
judgment.
Written disclaimer is not in the particular typeface required by law. Judge
may have the jury determine whether or not the Newport’s president
actually read and understood the disclaimer.
Newport may have a claim against Evers for breach of warranty. The
statute of limitations on Newport’s claim—which is shorter than that
governing Evers’ claim—is about to run out. Evers’ motion may lead
Newport’s lawyer to wake up and file a claim.
Cost of litigating the motion for summary judgment.
– If the motion is denied, Evers’ costs will be increased.
– If the motion is granted, Newport Records will likely appeal, with
attendant costs and the possibility of still having to go to trial.
Divergent and Convergent Aspect of
Deliberative Problem Solving
What’s Unusual About This Hand?
The two-systems model of information
processing
System 1 (intuitive)
System 2 (reflective)
Process Characteristics
Automatic
Effortless
Associative
Rapid, parallel
Process opaque
Skilled action
Affective
Causal properties
Concrete, specific
Prototypes
Controlled
Effortful
Deductive
Slow, serial
Self-aware
Rule application
Content on which Processes Act
Neutral
Statistics
Abstract
Sets
Bat and Ball
• Together, a bat and a ball cost $1.10
• The bat costs a dollar more than the
ball
How much does the ball cost?
Bat and Ball
• Together, a bat and a ball cost $1.10
• The bat costs a dollar more than the
ball
• How much does the ball cost?
• $1.05 (bat) + $0.05 (ball) = $1.10
• We know how to calculate the right
answer, but sometimes the answer that
“jumps to mind” slips out.
Heuristics
• Mental shortcuts used in
judgment and decision making
• Fast and efficient
• Serve us well most of the
time… but not always