Lec1

Question 1

Price demo: Lindt chocolate

Judgment: would you be willing to pay ___ (UID digits)
=> yes or no

Then estimate the actual price

What were the results? Why is it irrational?

Answer 1

• the first question is a preference
• second one is about objective

Results:
the higher the digits, the higher the estimates, same for lower.
This is a result of the ANCHORING effect
Irrational bc these judgments are unrelated - what does our ID no. (arbitrary) have to do with the price of chocolates?

Question 2

Economist demo
- what occurs when (P) Print only is added to the options?

Answer 2

• becomes a decoy in the decoy effect
• more ppl choose (P+O) bc it feels like (O) is free, makes (P+O) more attractive (relative attractiveness)
• influences our preferences
• decoy allows us to focus attention on the easy comparison (focus on price vs features)

Question 3

Introspection

Answer 3

looking inward / observing our thoughts

Question 4

Misperceived causality: cold (weather) causes pneumonia

Answer 4

• our brains pick up correlations
• tend to automatically infer causal explanations, so a natural inference would be that cold causes pneumonia

Question 5

Persistence of false beliefs

Answer 5

• wouldn’t we notice over time that cold doesn’t cause pneumonia bc many cases where ppl are exposed to the cold
  => biases in interpreting info

Question 6

Possible origins of false belief

Answer 6

• misinterpreting a coincidence
• misperceived causality

Question 7

Irrational thinking

Answer 7

=> unconscious influences on judgments and decisions that can cause systematic errors
our mental processes allow us to make complex decisions with limited info, can lead to systematic errors

Question 8

What did Tversky and Kahneman propose?

Answer 8

that we rely on heuristics (mental shortcuts - fast, shortcut) to make reasonable and fast judgments under uncertainty