Cognitive Psychology

Topics: Decision making, Risk, Psychology Pages: 8 (2887 words) Published: February 22, 2014
Cognitive psychology essay
In this essay I will discuss three topics on Cognitive Psychology in relation to three everyday phenomena, while also exploring how useful Cognitive Psychology is in predicting these everyday phenomena. Another aspect will be applying cognitive psychology to these matters and identifying how it can be used to improve them. Decision Making

The first topic I will discuss is decision making, which cognitive psychology has developed many definitions and theories in order to explain and predict the process and outcome of it. Attention is one of the cognitive processes most heavily linked with decision making, as is memory and learning. Attention tends to be used in decisions from description such as when information in numeric or graphic form is provided. Memory and learning is used in making decisions based on past experiences, where trial and error are used and people become better at making decisions when they are more aware of the process and of the potential outcomes. These attributes can be described in a scientific and methodological form, but it must also be noted that decisions are made by humans and so are subject to human error and irrational decisions. Despite this, Cognitive Psychology has developed some useful theories on decision making. One of these theories is heuristics, which is a ‘simple and efficient rule of thumb that works well in most circumstances’ (Madigan, 2012). Here memory and experience is relied on heavily to make sense of the events in question. This is not difficult, however the process can be easily flawed. People can make mistakes when using these methods or bias can influence their decision making. An example of this would be the availability heuristic where a quick decision can be made through an initial reaction, however a problem with this might be not taking more time to investigate into what the best decision might be, as a biased decision may feel like the right one to make, but it could just be clouding your judgement. Another form of is the representativeness heuristic where people use past similar events as a ‘prototype’ in order to try and determine the outcome of something. This can work well for general social use, but I don’t believe it can be relied on for every single situation as it is more of a guideline. In terms of predicting and improving everyday performance I think heuristics can be very good in helping people understand the process of decision making, however I think its functions are limited to a certain extent. An interesting topic to link to cognitive psychology studies in decision making is economics. Similarities can be taken from the approach to predicting and improving decision making. Ideas from cognitive psychology sources can be taken and applied to economics and vice versa in order to get a different perspective on matters. An understanding of the cognitive psychology approach to decision making can give an edge to someone involved in economics, such as the business aspects of it like Advertising, retail, and corporate strategy. It can also benefit anyone studying microeconomics as they cover a number of different topics where each person’s decisions are very important. In advertising, people need to be aware how consumers who watch their advertisements will react to them, and how their thought process will then work in order to decide whether or not to buy the product advertised. In corporate strategy, firms must make decisions in relation to maximising profit and market share. They have to be innovative and make better, more informed decisions than rival firms, especially since a bad decision by a large firm can have devastating repercussions. An example of some bad decision making by a firm is Schlitz beer who tried to go from number 2 beer to number 1 in the 1970’s. They cut the time it took to make the beer and started using cheaper ingredients. This worked in making a cheaper more profitable beer, however it tasted terrible...
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