11. Decision Making

Question 1

What does the rationality of a decision describe

Answer 1

how well you select ways of thinking/actions that best serves your goals in the limitations of an environment

Question 2

What is cognitive overload

Answer 2

When the information available overwhelms the cognitive processing available

leads to less optimal decisions

Question 3

According to Galotti, what are the five types of tasks involved with decision making

Answer 3

1. set or revise goals
2. make plans
3. gather information
4. structure the final decision
5. make a final selection

Question 4

What is decision structuring

Answer 4

the way of organizing information so that we are able to make a decision

Question 5

what are subjective probabilities vs objective probabilities

Answer 5

subjective probabilities: influenced by the characteristics of the probability estimator (etc. your success depending on mood)

objective probabilities: not infuenced

Question 6

what is a bias

Answer 6

a way of thinking that leads to systematic errors

Question 7

what are cognitive illusions

Answer 7

systematic biases for thinking

Question 8

What is the availability heuristic

Answer 8

Deeming that the things that comes to mind more easily are more frequent

Question 9

What is the representativeness heuristic

Answer 9

The expectation that the results will be representative of the process that generated them

etc. coin flips

Question 10

What is the mistaken belief in the law of small numbers

Answer 10

People mistakenly believe that small samples will resemble the populations from which they are drawn

etc. coin flips, people

Question 11

A “Man who” arguments are a misuse of which heuristic
“I know a man who….”

Answer 11

representativeness heuristic

Question 12

What are framing effects?

Answer 12

When we evaluate changes from a reference point

• problem: changing the description of a situation can make us adopt different reference points

think $$ of a sale

Question 13

What is Anchoring?

Answer 13

When the initial starting point has a huge effect on the final estimate

etc. calculating 1x2x3… 8 vs 8x7x….1

Question 14

What is Illusory correlation?

Answer 14

When we see nonexistant relationships

etc. hair twisting, finding personality vs. handwriting

Question 15

What is the Hindsight Bias

Answer 15

Looking back, events seem inevitable

Question 16

What kind of curve plots confidence against accuracy

Answer 16

a calibration curve

Question 17

What does it mean for the calibration curve to deviate below the 45deg line

Answer 17

overconfidence

Question 18

Explain normative vs prescriptive vs descriptive models of decision making

Answer 18

normative: ideal performance in ideal circumstances

prescriptive: what we “ought” to behave, given that circumstances are not ideal
- prescribe

descriptive model: what do people actually do

Question 19

What kind of model is expected utility theory

Answer 19

normative

Question 20

What is expected utility theory

Answer 20

maximizing the expected utility

Question 21

What kind of model is image theory

Answer 21

descriptive model

Question 22

What is the image theory model

Answer 22

we narrow all of our decision to a few, by comparing the
1. value image: our values and morals
2. trajectory image: our goals for the future
3. strategic image: how we want to attain the goal

Question 23

What kind of decisions do experts make

Answer 23

recognition-primed decision making

Question 24

What is recognition primed decision making

Answer 24

comparing the situation to previous experiences

Question 25

what is neuroeconomics

Answer 25

study of how the brain interacts with the environment to make complex decisions + the role of emotions in this process

Question 26

T/F Decision making can be highly emotional

Answer 26

T

Phineas Gage; impaired both decision making and emotional control

Question 27

What active brain regions positively predicted purchasing regions

Answer 27

PFC

Question 28

What active brain region negatively predicted purchasing decisions

Answer 28

insula

• insulate

Question 29

What are humans good at when it comes to decision making and what are they bad at?

Answer 29

they are good at figuring out which variables are good predictors

they are bad at integrating information to a decision