Judgement and Decision Making

Question 1

A measure of subjective value or worth.

Answer 1

Utility

Question 2

Judging the probabilities of events based on how easy it is to recall examples of each.

Answer 2

availability heuristic

Question 3

Judging the likelihood of an outcome based on how easy it is to imagine a plausible series of events leading to that outcome.

Answer 3

simulation heuristic

Question 4

A failure to appreciate the independence of random events, e.g., to believe that if tossing a coin yields 10 “heads” in a row, then the next toss is more likely to yield a “tails”.

Answer 4

gambler’s fallacy

Question 5

Believing that a subset can exceed the size of the set that contains it, i.e., that the probability belonging to categories A and B can exceed that of belonging to category A.

Answer 5

conjunction fallacy

Question 6

Estimating the probability that an object or person belongs to a category based similarity to the category prototype.

Answer 6

representativeness heuristic

Question 7

The prior probability of a given event before any further information is provided, e.g., the probability that some random person is an engineer, without knowing anything specific about them.

Answer 7

base rate

Question 8

A tendency to make different choices among the same alternatives, depending on how the problem is worded.

Answer 8

framing effects