1 Flashcards
Availability heuristic?
Availability - reported more and more “on your radar” (suicides>homicides but we hear about homicides more)
Representativeness heuristic?
Representativeness - rule of typical things
(Linda a banker or Linda a banker and a democrat). Also forgetting base population (more truck divers than Ivy League professors)
Affect Heuristic?
Affect - -If you’re happy, you underestimate the risk of anything (global effect) bad happening
-if you’re unhappy, you overestimate the risks of bad things happening
Anchoring heuristic?
during decision making, an individual relies on an initial piece of information to make subsequent judgments
Decoy?
Steers people toward?
Contradicts?
When to use?
Dummy option which causes preference reversals ( flip flops) between two other options and the choice set.
unambiguously dominant choice
Standard economic models of individual choice which assume preferences be independent of the irrelevant alternatives
With asymmetric dominance
Asymmetric Dominance
An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others.
Rational Agent theories about decision making assume
that behavioral choice is a product of?
Expectation (subjective probability) x Utility (subjective value)
Health Belief Model would say what about smokers not quitting?
Therefore the target information would be to?
smokers may not quit because
they underestimate their probability of getting disease
(perceived susceptibility).
provide more
accurate information about the risk of disease
Doctrine of revealed preferences?
someone performs a certain act, it must be because they
have a preference for it
Reading a article with a good/bad slant, contaminates what level? (first, what are the levels?)
Local - similar instances (reading about cancer influences perceptions about cancer)
Generalized - similar family of instance (reading about cancer effects thoughts on other diseases)
Global - everything
Contaminates things on a Global level
Why we make mistakes when choosing?
1) bad at forecasting
2) Choice gets highjacked by value-seeking (large sodas)
Principle of loss aversion?
Prospect of gain to compensate for certainly of loss?
People hate to lose what they’ve already got, far more than
the prospect of gaining something they don’t have.
the prospect of a gain has to be twice as
large to compensate for the certainty of loss
Loss aversion in setting of smoking?
certainty of giving up the pleasure of smoking
looms much larger than the uncertain prospect of
health benefits
Present bias?
People do not treat choices in the near future the same way as
they treat choices in the distant future
(people want to quit smoking, but not today)
