Chapter 13: Decision Making

Question 1

what is Selecting and evaluating choices to arrive at conclusions

Answer 1

decision making

Question 2

What are the presumptions of classical theories and decision making (3)

Answer 2

• people have complete information about decisions (all information)
• people are rational. No emotions are involved in decision making
• people are sensitive to subtle/small changes

Question 3

What is Homo Economicus

Answer 3

“economic man” who does not exist

referres to the hypothetical person who behaves in exact accordance with their rational self-interest

Question 4

Early theorists/economists did not consider the _________ aspects of decision making

Answer 4

irrational aspects

Question 5

What are the factors affecting decision making (3)

Answer 5

Heuristics
Emotions
Incomplete information

Question 6

Kinds of heuristics (5)

Answer 6

Availability
Representativeness
Satisficing
Anchoring 
Framing

Question 7

What are availability heuristics and give an example

Answer 7

Availability heuristic—events that come to mind more easily are judged more likely
Example- fear of airplanes

Question 8

What are representativeness heuristics

Answer 8

Representativeness heuristic—making judgments based on how much an event resembles other events

Question 9

What is satisficing

Answer 9

Satisficing: Select the option that is as close to the ideal as possible, then stop
ex: Choosing the top 5 of something instead of considering

Question 10

What is anchoring

Answer 10

Anchoring: Using reference points to adjust evaluations

example- starbucks medium to large ratio and price

Question 11

what is framing

Answer 11

Framing: Presentation of option affects judgment

Question 12

Judges approve more parole requests (65%) after a meal is an example of ?

Answer 12

Emotions affecting decision making