Ch. 13. Decision Making Flashcards
What is the approach to choosing between alternative possible actions that describes the best possible or optimal decision?
normative
What is the tendency to avoid choices with negative outcomes, even when they have a higher expected value than other apparently safer alternatives?
risk aversion
What is the subjective value of an option?
utility
What is a tendency to prefer the current state of affairs?
status quo
Which effect arises when irrelevant features of a situation impact decisions that are made?
framing
Which decision theory stresses relative gains and losses?
prospect theory
What is the tendency to over-value a possessed object and to require more money to sell it than to buy it in the first place?
Endowment effect
What term refers to making real life decisions in the field?
naturalistic decitionmaking
Which of the following involves judging frequency or probability of events by how easy it is to bring the events to mind?
availibility heuristics
What is the study of neural processes underlying economic decisions?
neuroeconomics
Which cognitive system is seen as automatic, implicit, fast, effortless and emotional?
system 1
What is the subjective counterpart to expected value?
expected utility
Which bias is involved if there is a probability that one of the options could lead to negative outcomes for the decision maker?
risk aversion
What involves judging frequency or probability of an event or object by how typical it is of its category?
representativeness heuristics
What is the term for expert knowledge based decision making when cues in the situation are recognized as indicating particular actions?
recognition primed decision making
