How humans make decisions

Question 1

What is anchoring heuristic?

Answer 1

It is a nudge

a cognitive bias where individuals rely heavily on the first piece of information they receive when making judgments or decisions

Question 2

What does reactance mean?

Answer 2

when people feel ordered around, they might get mad and do the opposite of what is being ordered (or even suggested).

Question 3

What is availability heuristic?

Answer 3

It refers to the tendency of individuals to rely on immediate examples or instances that come to mind easily when assessing the likelihood or frequency of an event or the importance of a particular factor.

The availability heuristic helps to explain much risk-related behavior, including both public and private decisions to take precautions

Biased assessments of risk can perversely influence how we prepare for and respond to crises, business choices, and the political process

e.g. Because homicides are much more heavily because homicides are much more heavily

Question 4

what is representativeness heurtistic?

Answer 4

People often rely on stereotypes or generalizations to assess the likelihood of an event or the category to which something belongs

The idea is that when asked to judge how likely it is that A belongs to category B, people answer by asking themselves how similar A is to their image or stereotype of B (that is, how “representative” A is of B).

Question 5

What is optimism an overconfidence in nudging?

Answer 5

survey reveal a high degree of unrealistic optimism about performance in the class

The “above-average” effect is pervasive

Unrealistic optimism can explain a lot of individual risk-taking, especially in the domain of risks to life and health

Unrealistic optimism is a pervasive feature of human life; it characterizes most people in most social categories. When they overestimate their personal immunity to harm, people may fail to take sensible preventive steps

Question 6

What is gain and losses in nudging about?

Answer 6

Once you have a mug, you don’t want to give it up. But if you don’t have one, you don’t feel an urgent need to buy one.

Question 7

What is loss aversion?

Answer 7

the tendency of individuals to prefer avoiding losses over acquiring equivalent gains. It is a cognitive bias where people feel the pain of losses more strongly than the pleasure of equivalent gains.

If you want to discourage the use of plastic bags, should you give people a small amount of money for bringing their own reusable bag, or should you ask them to pay the same small amount for a plastic bag

Question 8

What is status quo bias?

Answer 8

People tend to have a bias toward maintaining their current situation rather than making a change, even when the change may be advantageous or rational.

Most teachers know that students tend to sit in the same seats in class, even without a seating chart. But status quo bias can occur even when the stakes are much larger, and it can cost people a lot of money.

One of the causes of status quo bias is a lack of attention. Many people often adopt what we call the “yeah, whatever” heuristic

Question 9

What is framing?

Answer 9

the way information or choices are presented to individuals, which can significantly influence their decisions and behavior

Question 10

What is temptation in regards of nudging?

Answer 10

refers to the allure or attraction towards immediate gratification or short-term benefits, even when it may not be in an individual’s long-term best interest.

Question 11

What is mindlessness in regards of nudging?

Answer 11

refers to the tendency of individuals to make decisions or behave in an automatic, routine manner without fully considering the implications or alternatives. People often rely on mental shortcuts, heuristics, or default options without engaging in conscious deliberation.

Question 12

What is self control strategies?

Answer 12

refer to techniques or interventions that aim to help individuals exert self-control and make choices aligned with their long-term goals, even when facing short-term temptations or biases.

e.g.

default option - making the choice as the default option, makes it easier to choose

pre-commitment - Allowing individuals to make commitments in advance can help them overcome self-control challenges.

feedback and monitoring

Prompts and Reminders - an alarm clock

Temporal Reframing

Incentives and Rewards

Question 13

What is mental accounting?

Answer 13

When people engage in mental accounting, they mentally assign different funds or resources to specific categories or accounts. For example, they may have separate mental accounts for savings, entertainment, or groceries. Each account is typically treated as distinct, with its own rules and limitations.

used to guide individuals’ decisions by framing choices in a way that aligns with their mental accounting biases.

Question 14

What does following the herd mean?

Answer 14

Doing what others are doing

Question 15

There are two basic categories in social influences which?

Answer 15

Information - If many people do something or think something, their actions and their thoughts convey information about what is best for you to do or think

peer pressure - If you care about what other people think about you , then you might go along with the crowd to avoid their wrath or curry their favor.

Question 16

What is Cultural Change about?

Answer 16

involves the transformation of values, beliefs, attitudes, and behaviors within a society or specific cultural group over time.

Different cultures may have varying responses to certain nudges due to cultural norms, values, and social expectations. A nudge that works effectively in one culture may not have the same impact in another.

Question 17

What is political change about?

Answer 17

refers to shifts in the political landscape, policies, and governance structures within a society.

Nudges can also be utilized as a tool for political change, where policymakers and governments aim to influence citizen behavior in ways that align with their policy objectives.

Question 18

What is unpredictability about?

Answer 18

refers to the inherent complexity and variability of human behavior and decision-making.

nudges are designed to influence behavior in predictable ways, human responses can still be influenced by a wide range of factors, including individual differences, contextual variables, and evolving circumstances.

Question 19

Identity: What People Like You Do (What is this technique about?)

Answer 19

is a nudge technique that leverages social norms and the influence of identity on behavior. It suggests that people are influenced by what others similar to them are doing in a particular situation. This nudge technique aims to encourage desired behaviors by highlighting the actions or choices of individuals who share a similar identity or background with the target audience.

For choice architects who want to use social influences, a challenge is to work with, rather than against, people’s sense of who they are. That sense might have to do with nationality, culture, region, ethnicity, religion, politics, or a favorite team.

Question 20

What is Pluralistic Ignorance?

Answer 20

refers to a situation where individuals privately hold one belief or attitude but incorrectly assume that most others hold a different belief or attitude

When individuals are unsure about the appropriate behavior in a given situation, they may look to others for guidance. However, if everyone in the group is also uncertain and conforms to what they believe is the prevailing norm, a false consensus can emerge.

Question 21

What does it mean to use social norms as a nudge?

Answer 21

If choice architects want to shift behavior and to do so with a nudge, they might be able to achieve this by simply informing people about what others are thinking and doing

Descriptive norms
-what is commonly done in a particular situation.

Injunctive norms
-highlight what is socially approved or disapproved

Personalized social norms
- Personalized social norms provide individuals with information about their own behavior compared to the behavior of their peers

Question 22

Self control strategies: What is the planner and what is the doer?

Answer 22

The optimistic Planner sets the alarm for 6:15 a.m., hoping for a full day of work, but the sleepy Doer turns off the alarm and goes back to sleep until 9:00.

Question 23

What is collective conservatism?

Answer 23

We can also see why many groups fall prey to what is known as “collective conservatism”: the tendency of groups to stick to established patterns even as new needs arise. Once a practice (like wearing ties) has become established, it can be perpetuated, even if there is no reason for it.

Question 24

What is informational cascade?

Answer 24

What Salganik and his co-authors found was an “informational cascade,” which occurs when people receive information from the choices of others. Suppose that there is a group of eight people, deciding whom to hire for a new position in a small business. The three candidates are Adam, Barbara, and Charles. If the first speaker says that Adam is clearly best, the second might agree, not because she prefers Adam, but because she trusts the first speaker and it is not clear that he is wrong. Once the first two speakers have spoken in favor of Adam, they have created a strong nudge on his behalf, and the third speaker might simply go along