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Article

Judgment and Decision-Making Processes  

Richard P. Larrick and M. Asher Lawson

The field of judgment and decision making (JDM) arose in psychology to test the rational assumptions posed in other fields such as economics and statistics. This has led to three major contributions of the field. First, to the extent that people systematically deviate from rational models, their decisions are less than optimal. This has consequences for both business practice and for assumptions in many professional fields, such as finance, medicine, and law. Second, the deviation from rational models has led JDM researchers to identify categories of psychological processes that do guide decision making. These include associationistic memory processes, psychophysical processes, emotional processes, and learning. Third, building on the first two contributions, the field of JDM has merged rational and psychological perspectives to explore ways to improve decision making. These methods include a variety of interventions known as nudges, choice architecture, debiasing, and the use of external aids such as algorithms and the wisdom of crowds. The three contributions of JDM help researchers in a number of fields analyze problems and design helpful solutions. Workplace examples include designing better processes for hiring and evaluation, goal setting, and employee retirement savings planning.

Article

Development of Judgment, Decision Making, and Rationality  

Maggie Toplak and Jala Rizeq

There is a long tradition of studying children’s reasoning and thinking in cognitive development and education. The initial studies in the cognitive development of reasoning were motivated by Piagetian models, and developmental age was thought to bring the gradual onset of logical thinking. The introduction of heuristics and biases tasks in adults and dual process models have provided new perspectives for understanding the development of reasoning, judgment, and decision-making skills. These heuristics and biases tasks provided a way to operationalize the systematic errors that people make in their judgments. Dual process models have advanced our understanding of the basic processes implicated in both optimal and non-optimal responders on several types of paradigms, including heuristics and biases tasks and classic reasoning paradigms. Importantly, these skills and competencies are generally separable from the types of higher cognition assessed on measures of intelligence and executive function task performance. Given the history of the study of reasoning in cognitive development, there is a need to integrate our understanding across these somewhat separate literatures. This is especially true given the opposite predictions that seem to be suggested in these different research traditions. Specifically, there is a focus on increasing logical development in the classic cognitive developmental literature and alternatively, there has been a focus on systematic errors in judgment and decision-making in the study of reasoning in adults. This article provides an integration of the two aforementioned perspectives that are rooted in different empirical and historical traditions. These considerations are addressed by drawing upon their research traditions and by summarizing more recent developmental work that has investigated these paradigms.