Ch. 15 part 2

Question 1

The mistake of allowing their preferences for outcomes to affect assessments of their likelihood.

Answer 1

Wishful thinking

Question 2

A measure of the logical relationship between a set of evidence and a conclusion.

Answer 2

Logical probabilities

Question 3

the options available in a decision situation.

Answer 3

Alternatives

Question 4

Preferences among alternatives are complicated by such influences as…

Answer 4

Anticipated regret, the endowment effect, and loss aversion

Question 5

Assess the merits of those outcomes.

Answer 5

Evaluative judgments

Question 6

A measure of an individual’s degree of belief in a proposition. Applicable to any outcome concerning which someone might venture an opinion.

Answer 6

Subjective Probabilities

Question 7

Select an alternative that is good enough for current purposes.

Answer 7

Satisfice

Question 8

Uncertainties affecting the outcomes of a choice.

Answer 8

Chance nodes

Question 9

Influence whether an option is seen as acceptable or not.

Answer 9

Reference point

Question 10

The eventual results or consequences of a decision.

Answer 10

Outcomes

Question 11

What are 5 activities that are essential to effective decision making?

Answer 11

Think, decompose, simplify, specify, and rethink.

Question 12

The task of assessing alternatives according to certain criteria is a common functional demand in problem solving.

Answer 12

Evaluation

Question 13

Is a judgmental activity in which relevant factors are mentally weighed and combined to reach a conclusion.

Answer 13

Decision Making

Question 14

Identified many ways in which individual decision makers violated decision theoretic norms of rationality.

Answer 14

Behavioral decision theory and behavioral economics

Question 15

An evaluation method developed by economists is often employed in practical affairs.

Answer 15

Cost-benefit analysis

Question 16

A measure of observed relative frequency or the known composition of a population.

Answer 16

Frequentist probabilities

Question 17

Is a logical, formal, and highly prescriptive approach to decision making.

Answer 17

Classical decision theory

Question 18

Reliable objective probabilities can be attached to the chance nodes of a decision tree.

Answer 18

Decision making under risk

Question 19

It assumes that people know a great deal about the situation they’re in and instructs them to choose the alternative that maximizes their preferences.

Answer 19

Classical decision theory

Question 20

Expressed preferences are often constructed on-the-fly, being shaped by the particular past experience one recalls, visceral good-bad emotional reactions to alternatives.

Answer 20

The mere exposure effect

Question 21

People don’t have the mental capacity to handle the world’s complexity.

Answer 21

Bounded rationality

Question 22

Unwilling to cut their losses, people persist in courses of action that are unlikely to succeed.

Answer 22

Escalation of commitment

Question 23

Subjective probabilities are used to quantify chance nodes.

Answer 23

Decision making under uncertainty

Question 24

Decision situations in which there is a sure thing alternative that is better than the worst outcome of risky alternative, but not as good as the best outcome of that alternative.

Answer 24

Basic decision dilemma

Question 25

One knows what one will get as a result of choosing an alternative.

Answer 25

Decision making under certainty

Question 26

People don’t accurately predict their future enjoyment from decision outcomes.

Answer 26

Satiation effects

Question 27

Situation in which a choice must be made.

Answer 27

Choice nodes

Question 28

It provides a theoretical basis for the elicitation of individual utility curves or functions that accurately express a person’s preferences over uncertain outcomes.

Answer 28

Expected utility theory

Question 29

Forecast the outcomes of courses of action.

Answer 29

Predictive judgements

Question 30

Current decisions are influenced by past expenditures that have no rational bearing on the issue.

Answer 30

Sunk cost fallacy