Bounded rationality

Question 1

BE model can be classified as mainstream BE models and Full Rationality models

?????

Answer 1

False, it’s bounded rationality

Question 2

Subjective expected utility is given by a linear combination of subjective values of outcomes weighted with subjective …

Answer 2

probability

Question 3

Prospect theory is NOT part of mainstream BE

Answer 3

False, 6

Question 4

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

Answer 4

True, 6

Question 5

System 1 is slow, serial, effortful and deliberative

Answer 5

False, 7

Question 6

System 1 is fast, automatic, unconscious, effortless, associative, emotionally and culturally driven, difficult to control

Answer 6

True, 7

Question 7

System 2 is slow, serial, effortful, deliberative

Answer 7

True, 7

Question 8

System 2 is fast, automatic, unconscious, effortless, associative, emotionally and culturally driven, difficult to control

Answer 8

False, 7

Question 9

Heuristics are algorithms

Answer 9

False, 7

Question 10

Automatic decision processes can be skilled

Answer 10

True, 7

Question 11

The law of small number is part of the representativeness heuristics

Answer 11

True, 10

Question 12

People ignore preexisting base rate frequencies

Answer 12

True, 10

Question 13

In the Tom W. experiment of Kahneman and Tversky there were two groups: base-rate and similarity

Answer 13

False, 11

Question 14

In the Tom W. experiment Kahneman and Tversdky investigated the representativeness heuristics

Answer 14

True, 14

Question 15

P(A) >= P(A intersected B).

The Linda experiment proved a bias (conjunction fallacy) regarding this equation

Answer 15

True, 17

Question 16

The law of small numbers essentially says that people tend to generalize from small amounts of data

Answer 16

True, 23

Question 17

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

Answer 17

False, 26

Question 18

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

Answer 18

True

Question 19

The availability heuristic makes people tend to correlate events that occur close together

Answer 19

True, 31

Question 20

People judge probabilities based on how available examples are to them is a synthesis of which heuristic?

Answer 20

Availability, 32

Question 21

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?

Answer 21

Availability, 32

Question 22

The first impression is important is a synthesis of what effect?

Answer 22

Anchoring

Question 23

People underestimate the probability of conjunctive events and overestimate the probability of disjunctive events

Answer 23

False, 34

Question 24

Simon told use to consider external constraints in our theory of rationality

Answer 24

True, 41

Question 25

Bounded rationality is almost the same thing as subjective expected utility maximization modified by some isolated cognitive constraints

Answer 25

False, 42

Question 26

Aspiration adaptation is a property of bounded rationality

Answer 26

True, 43

Question 27

Bounded rationality and optimization under constraints are two different concept

Answer 27

True, 45

Question 28

Sometimes less information makes people do better decisions. This is named as?

Answer 28

Less-is-more effect, 49

Question 29

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

Answer 29

ignorance-based

Question 30

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

Answer 30

satisficing, 51

Question 31

The secretary problem is an example of sequential decision-making

Answer 31

True, 52

Question 32

Heuristics are irrational

Answer 32

False, 53

Question 33

Heuristics allow us very accurate decisions with low effort

Answer 33

True, 53

Question 34

Human behavior is non-optimizing

Answer 34

True, 54