The Affect Heuristic

Revision as of 10:58, 21 February 2021

Abstract

The experimental part of the human mind has the ability to label objects and experiences with emotions. These labels are defined by Paul Slovic et al. as somatic markers in his paper on the affect heuristic. The affect heuristic is the act of using the somatic markers as a short-cut to make quick decisions or judgments (p.1336). This can be done consciously, but in most cases, it is done unconsciously, even before the mind has had the time to think up rational justification. With enough experience and knowledge, this method of making decisions can be highly efficient and flexible – especially when it is used consciously.

However, affect can easily be manipulated, both by ourselves and our environment. Bounded rationality is our ability to choose how rational we want to be when deciding, while bounded awareness is our ability to filter information and impressions. Both limit the efficiency of our decisions since it keeps the mind from realizing all possible outcomes. The environment can manipulate the information we get and how it is presented. This also affects how we feel about situations and outcomes.

The somatic markers also offer the ability to anticipate outcomes, which means it is very useful in risk management. If the decision-maker has had a similar experience to the situation they are analyzing, they can use the affect heuristic to identify risks, their probability, and their impact quickly. Another thing to be aware of is the fact that the human tends to perceive risk and benefit differently from reality. Rationally high risk can end in high reward and vice versa. However, most people find that when their personal benefit is high enough, the risk is smaller. Therefore, it is essential to know what lies behind decisions. Knowing how the mind makes decisions can help backtrack bad decisions or even prevent them since the decision-maker is now aware of his/her bias.

Keywords: Affect Heuristic, Slovic, Bounded Rationality, Bounded Somatic Markers

References will be added when more information has been given about them in the lectures.

Background

The Impact of Affect in Decision Making

The Affect Heuristic in Project Management

Defining Scope

Stakeholder management

Project Planning

Risk Management

• The perception of risk and benefit
• Fig. 2 and 2A from the Affect Heuristic (reference 1)
• Defining risks

Benefits of the Affect Heuristic

• Promotes creativity
• Kahneman's system 1
• Quick decisions
• Flexibility
• When there isn't time for consideration of all solutions.

Limitations of the Affect Heuristic

• Manipulation of information
• Bounded Awareness
• Bounded rationality
• How to use systems thinking to acquire the knowledge needed to make better decisions.

Annotated Bibliography

Bazerman, M. & Moore, D. (2013): Judgment in Managerial Decision Making.
Judgment in Managerial Decision Making is a book that summarizes the various aspects of descriptive decision-making practice. Chapter 4, which describes bounded awareness, has been used to understand how people unconsciously filter information to avoid information overload and simplify complex decisions. The book also covers bias, overconfidence, commitment, and motivation while also discussing how to improve decision-making from a people perspective. Most importantly, it introduces judgment heuristics, including the affect heuristic.

Slovic, P., Finucane, M., Peters, E., & MacGregor, D. G. (2007): The Affect Heuristic. Reprinted from Gilovich, T., Griffin, D., Kahneman, D. (2002), Heuristics and Biases: The Psychology of Intuitive Judgment.

Project Management Institute, Inc. (2017): Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th Edition). Project Management Institute, Inc. (PMI).
The book provides a framework for how to execute a project, program, or portfolio in theory. These methods and the use of standards should be incorporated in project management practice, mainly to avoid a situation where the affect heuristic is the optimal way of making a decision. However, it fails to describe how anything that involves people is, to some degree, unpredictable. Though it is possible to be prepared with a robust but flexible plan, unanticipated events will happen. It also fails to describe how to handle a situation where the project manager must think fast since it assumes that there will always be time for going through a process of requesting changes, which might not always be the case.

References

Current -> May change

1. Slovic, P., Finucane, M., Peters, E., & MacGregor, D. G. (2007): The Affect Heuristic. Reprinted from Glivovich, T., Griffin, D., Kahneman, D. (2002), Heuristics and Biases: The Psychology of Intuitive Judgment.

2. Züst, R. & Troxler, P. (2006): No More Muddling Through: Mastering Complex Projects in Engineering and Management.

3. Bazerman, M. & Moore, D. (2013): Judgment in Managerial Decision Making.

4. Project Management Institute, Inc. (PMI), (2019): Standard for Risk Management in Portfolios, Programs, and Projects. Retrieved from https://app.knovel.com/hotlink/toc/id:kpSRMPPP01/standard-risk-management/standard-risk-management.

5. Epstein, S. (1994): Integration of the Cognitive and the Psychodynamic Unconscious.

6. Gilovich, T., Griffin, D. & Kahneman, D. (2002): Heuristics and Biases: The Psychology of Intuitive Judgement