2 Fundamental process of economic behaviour

Question 1

How does the Action-Perception cycle work?

Answer 1

The brain transforms physical signals (lightwaves) from the environment into neural signals through a process called transduction. The next step is for the body to figure out how the process the signal.
* reflex - fast and automated reaction which is not passed on to the brain
* conscious decision-making - deliverate thinking before action

Question 2

What is a cruicial factor in perception?

Answer 2

Attention, as it can blend out senses based on environment requirements.

Question 3

What are the 3 cognitive executive functions?

Answer 3

• inhibitory control - the ability to surpress a desired or automated behaviour
• cognitive flexibility - the ability to leave known behavioural and thinking patterns
• working memory - using previous experiences to determine future behaviour

Question 4

What are the factors that influence learning?

Answer 4

• biological - neural wiring, hormone levels, eyesight
• psychological - personality, intelligence, control
• social/environmental - social support structures, education, network

Question 5

Explain the functionality of the eye.

Answer 5

The electromagnetic wavelenghts are transduced into neural signals further processed in the brain.
Two types of light sensors in the eye:
* cones - perception of color, need light to be activated
* rods - can perceive faintly lit objects in the dark

Question 6

How does the hearing sense work?

Answer 6

The sound pressure gets transduced into neural signals and further processed in the brain. This sense cannot be turned off by the brain therefore needs to be regulated in order to avoid permanent damage.

Question 7

What all sensations can we feel with touch?

Answer 7

• pressure
• texture
• heat
• pain
  are transduced into neural signals and further processed in the **somato-sensory **system.

Question 8

How does the smell get processed?

Answer 8

Chemical compounds are transduced into neural signals in the nose and further processed in the olfactory in the brain.

Question 9

Describe the sense of taste.

Answer 9

Chemical compounds are transduced into 5 flavors in the gustatory system of the brain.

Question 10

What are the aspects distinguished in affects (emotions) ?

Answer 10

• subjective experience
• physiological response
• actions

Question 11

What is the James-Lange Theory?

Answer 11

It implies that emotion is truly felt if it induces a physiological response.

Question 12

What is the two-factor theory by Schachter and Singer?

Answer 12

It implies that emotioin is a product of the physiological response and cognitive appraisal.

Question 13

Describe the logic behind the Circumplex Model of Affects by Russel.

Answer 13

All emotions have two independent dimensions in common:
* intensity (strong/weak)
* connotation (positive/negative)

Question 14

What are the innate emotions by Eckmann?

Answer 14

1. anger
2. sadness
3. happiness
4. fear
5. disgust
6. surprise
7. contempt

Question 15

What is the chronology of decision-making in work context.

Answer 15

1. Monitor environmental states and gather information
2. Define the problem requiring attention
3. Specify the goals and risks
4. Make a detailed diagnosis
5. Develop alternatives to the current situation
6. Establish criteria for the appraisal
7. Appraise the options
8. Implement the chosen option
9. Choose the best fitting option

Question 16

What does the bounded rationality model acknowledge?

Answer 16

That the human cognition has limited capacity and information gathering is therefore imcomplete. Decisions are made based on sequencial consideration of several solutions and the use of heurotics and acceptance of the first solution fulfilling minimum criteria.

Question 17

What is the priming and adapation effect?

Answer 17

The priming effect is the effect that a stimulus has on decision-making when this stimulus is briefly presented prior to decision stage and causes people to make decisions in line with the presented stimulus.

The adaptation effect is the effect that a polonged presentation of a stimulus has on a decision-making. When this stimulus is presented before decison, it causes people to alter their decision in opposition of the presented stimulus.

Question 18

Name a few psychological biases when it comes to decision-making.

Answer 18

• confirmation bias
• over-confidence bias
• anchoring bias
• hindsight bias
• halo effect
• actor-observer bias
• self-serving bias
• framing