Lecture 20- The Psychology Of Choice

Question 1

Types of choice

Answer 1

• Reducing uncertainty

- Choosing between alternatives

Question 2

People choose if

Answer 2

They are told to choose

Question 3

In Nisbett and Wilson’s study into choosing tights which were the most likely to be chosen

Answer 3

• First and last ones they felt.

- Primacy and recently effect

Question 4

Types of reducing uncertainty tasks

Answer 4

• Diagnostic hypothesis testing

- Predction

Question 5

Choosing between alternatives example

Answer 5

Irrational and rational decision making

Question 6

What’s a normative/prescriptive model

Answer 6

• The idea there is a correct way

- “rational” is selecting optimally

Question 7

What are 2 normative models of what is an optimal choice

Answer 7

• Expected value, how much benefit will you get, higher resource, value= object value x probability.
• Expected utility, highest psychological value, utility= subjective utility x probability

Question 8

Evidence against expected utility theory, Tversky and Kahneman

Answer 8

-Choice affected by framing and certainty (e.g. more people chose certainty of saving lives when it’s the same outcome)

Question 9

What is prospect theory

Answer 9

• People make decisions based on evidence based on the prospect of that information being of use
• Editing, selecting desired outcome
• Evaluation, value judgment based on calculation of anticipated utilities x probabilities

Question 10

What does prospect theory say about loss aversion

Answer 10

• Risky choice leading to gains, individuals are risk averse, prefer solution with higher certainty but lower expected value
• Risky choice leading to losses, individuals are risk seeking, prefer potential avoiding of losses but lower expected value

Question 11

What is probability weighting

Answer 11

People attribute excessive weight to events with low probabilities and insufficient weight to events with high probability

Question 12

What’s an example of heuristicness

Answer 12

Representativeness- choosing the option which has more representation in information

Question 13

What is conjunction fallacy

Answer 13

More specific information is a good cue to a good choice (when sometimes it’s not)

Question 14

What is anchoring

Answer 14

-We choose a value and we make a judgement based on anchoring to that judgement

Question 15

What is pseudodiagnosticity

Answer 15

• Belief that more information about current hypothesis is the most diagnostic choice
• The way in which we select information to test particular hypothesis

Question 16

What is preference reverse theory

Answer 16

Depending on the question you asked you can reverse your preference for the choice you’ve made

Question 17

What’s prospect theory’s explanation for preference reversal

Answer 17

• Loss aversion

- Anchoring

Question 18

What’s an example of preference reversal

Answer 18

• Ball et al.

- no anchoring effect or loss aversion effect