Bounded rationality Flashcards
BE model can be classified as mainstream BE models and Full Rationality models
?????
False, it’s bounded rationality
Subjective expected utility is given by a linear combination of subjective values of outcomes weighted with subjective …
probability
Prospect theory is NOT part of mainstream BE
False, 6
Most of the efforts of mainstream BE was to challenge neoclassical economic theories by identifying mistakes in decision-making and suggesting more realistic utility functions
True, 6
System 1 is slow, serial, effortful and deliberative
False, 7
System 1 is fast, automatic, unconscious, effortless, associative, emotionally and culturally driven, difficult to control
True, 7
System 2 is slow, serial, effortful, deliberative
True, 7
System 2 is fast, automatic, unconscious, effortless, associative, emotionally and culturally driven, difficult to control
False, 7
Heuristics are algorithms
False, 7
Automatic decision processes can be skilled
True, 7
The law of small number is part of the representativeness heuristics
True, 10
People ignore preexisting base rate frequencies
True, 10
In the Tom W. experiment of Kahneman and Tversky there were two groups: base-rate and similarity
False, 11
In the Tom W. experiment Kahneman and Tversdky investigated the representativeness heuristics
True, 14
P(A) >= P(A intersected B).
The Linda experiment proved a bias (conjunction fallacy) regarding this equation
True, 17
The law of small numbers essentially says that people tend to generalize from small amounts of data
True, 23
The gambler’s fallacy says that if something happens more frequently than normal during some period, then it will happen more frequently also in the future
False, 26
Only important postulate of the regression to the mean is that people with high scores tend to be above average in skill and in luck but only the skill portion is relevant to future performance
True
The availability heuristic makes people tend to correlate events that occur close together
True, 31
People judge probabilities based on how available examples are to them is a synthesis of which heuristic?
Availability, 32
People overstate the risk from driving without a seat belt if they personally know someone who was killed while driving without is an example of which heuristic?
Availability, 32
The first impression is important is a synthesis of what effect?
Anchoring
People underestimate the probability of conjunctive events and overestimate the probability of disjunctive events
False, 34
Simon told use to consider external constraints in our theory of rationality
True, 41
Bounded rationality is almost the same thing as subjective expected utility maximization modified by some isolated cognitive constraints
False, 42
Aspiration adaptation is a property of bounded rationality
True, 43
Bounded rationality and optimization under constraints are two different concept
True, 45
Sometimes less information makes people do better decisions. This is named as?
Less-is-more effect, 49
If the agents recognize only one alternative and they have no or little information about others, they choose the recognized alternative. This is …. decision-making
ignorance-based
The …. heuristics make us:
delete large parts of the problem that generally leads to discovering useless strategies
decompose the problem into subunits
use memory and experience to focus on appropriate subsets of knowledge
satisficing, 51
The secretary problem is an example of sequential decision-making
True, 52
Heuristics are irrational
False, 53
Heuristics allow us very accurate decisions with low effort
True, 53
Human behavior is non-optimizing
True, 54
