Judgement, Reasoning, & Decision-Making (ch 13) pt 2

Question 1

Risks/Ambiguity & Decision-Making

Answer 1

Preference for risky gambles over ambiguous gambles/ → big fear of the unknown (ex: 50% risky seen better than 100% ambiguous).’

Question 1

Risky

Answer 1

unknown outcomes with known probabilities.

Question 2

Ambiguity

Answer 2

unknown outcomes & unknown probabilities.

Question 3

Utility

Answer 3

Outcomes that are desirable because they are in the person’s best interest.

Question 4

Expected Utility Theory 1

Answer 4

Decision Makers are fully informed regarding all possible options for their decision and of all possible outcomes.

Question 5

Expected Utility Theory 2

Answer 5

Decision Makers are infinitely sensitive to the subtle distinctions among decision options.

Question 6

Expected Utility Theory 3

Answer 6

Decision Makers are fully rational in regard to their choice of options.

Question 7

Emotions & Decision Making

Answer 7

Emotions affect decisions. Emotions that people predict that they will feel concerning an outcome as well. People can accurately predict their emotions.

Question 8

Kermer et al (2006)

Answer 8

Showed people greatly overestimate the expected negative effect of losing compared to the actual effect of losing.

Question 9

Framing Effect

Answer 9

Perception of gravity influences a flip-flop in choice when choices are equivalent (ex: zombie problem of 400 will die vs 200 will be saved).

Question 10

Intertemporal Choices

Answer 10

Making choices at different points in time. Smaller now & larger later (food, exercise, money).

Question 11

Temporal Discounting

Answer 11

Later rewards perceived as less valuable.

Question 12

Multi-Attribute Choice

Answer 12

Choices vary across multiple attributes. Lexicographic rule, satisficing, & elimination by aspects.

Question 13

Satisficing

Answer 13

Don’t worry about the best, go for “good enough.” Trade-off between optimal choice and decision time, meets cutoffs then choose the first one that’s good enough.

Question 14

Lexicographic Rule

Answer 14

Take the best item on the most important attribute.

Question 15

Elimination by Aspects

Answer 15

Rule out choices by criterion X, then Y, then Z (like filtering).