Lecture 7

Question 1

Choice

Answer 1

A selection made between two or more alternatives

Question 2

Bounded Rationality

Answer 2

Limitations or constraints in the reasoning process of the decision maker

Question 3

Optimizing

Answer 3

*Consistent and immediate feedback about
predictors
*Practice effects
*Easy-access to base-rate information

Question 4

Satisficing

Answer 4

*set an aspiration criterion level
*searches all possible choices until a choice is
found that satisfies the aspiration criterion
level
* select this alternative and stop search

Question 5

OPTIMIZING VS. SATISFICING: CONCEPTUAL DIFFERENCE

Answer 5

Optimizing: Choose the best possible outcome
Choose the outcome that the decision-maker is willing to accept
Satisficing: Choose the outcome that the
decision-maker is willing to
accept

Question 6

Is having too many choices detrimental?

Answer 6

*People prefer having extensive choices over
limited choices
*People’s motivation to act on their choices is
lower when there are extensive choices

Question 7

Choice Overload Effect

Answer 7

“the provision of extensive choices may
sometimes still be seen as initially desirable, it
may also prove unexpectedly demotivating in
the end.”

Question 8

WHEN ARE PEOPLE SUSCEPTIBLE TO THE
CHOICE OVERLOAD EFFECT?

Answer 8

*When people are not familiar with the options
*When people do not have a preference for any
of the choices

Question 9

Weight

Answer 9

the importance of each probability cue

Question 10

cue value

Answer 10

the value associated with each probability cue for each option

Question 11

Question:
Are there individual differences in how people
make decisions?
If so, what factors determine whether people
maximize

Answer 11

Three factors were identified
*Being open to better alternatives
*Having high standards
*Being uncertain about the optimal outcome