Chapter 14: Decision Making

Question 1

Descriptive Models consists of ______ and _________

Answer 1

Compensatory models; Non-compensatory models

Question 2

Types of compensatory models

Answer 2

Additive model: sum up the attractive and unattractive attributes for each alternative to arrive at an overall score for that attribute.

Additive-difference model: calculate differences in values on each attribute, then sum up difference scores.

Question 3

Types of non-compensatory models

Answer 3

Elimination by aspects model: examine each attribute one at a time for all alternatives. If an attribute of any alternative fails some criterion, that alternative is eliminated.

Conjunctive model: examine each alternative one by one. If an alternative meets some set of minimum criteria, it is selected

Question 4

_______ is used when one selects the first alternative to meet the minimum criteria rather than the best alternative.

Answer 4

Satisficing search (Simon, 1957)

Question 5

4 Heuristics in DM

Answer 5

1. Availability heuristics (Tversky & Kahneman, 1973)
2. Representative heuristics (Tversky & Kahneman, 1973)
3. Anchor-and -adjustment (Tversky & Kahneman, 1973)
4. framing effect

Question 6

4 Normative decision making models

Answer 6

Expected value(EV): average value determined by combining the value of the event with the probability of its occurrence

Expected utility(EU): replaces actual value with subjective value of outcome (i.e., what is the outcome worth to the person?)

Subjective expected utility(SEU): Replaces probabilities with subjective probabilities.

Risk dimensions: people may differ in how much emphasis they place on each of the four components of the expected value model (and its derivatives): Components: prob(win), value(win), prob(loss), value(loss)

Question 7

Successful Action-based Decision making entails:

Answer 7

Recognition of situation: identify nature of emergency and goal to achieve → action to be taken

Expertise: no need to consider alternatives which requires much cognitive resources and time as experts can choose an appropriate course of action than best alternative