Module 1 Flashcards
1
Q
Bounded rationality
A
- Resources are limited (time, cognitive, etc.)
- We often don’t optimize but “satisfice” (Only consider a few alternatives)
2
Q
Predictable irrationality
A
- We are not just often “wrong”
- We are systematically wrong
- That means we can study how we decide
3
Q
System 1
A
Intuitive answer:
- Automatic
- Fast
- Not cognitively demanding
4
Q
System 2
A
Rational answer:
- Controlled
- Slow
- Cognitively demanding
5
Q
Choice context effects
A
Presence of dominating option
6
Q
Compromise effect
A
2 vs 3 options
7
Q
representativeness
A
“ The more X resembles Y, the more likely X is to be Y”
(stereotypes)
8
Q
Availability
A
“The more examples of X come to mind; the more likely X is”
9
Q
Anchoring
A
The first pieces of information overly matter
10
Q
Biases system 2
A
- Choice context effects)
- Compromise effect
- Attraction effect
11
Q
Biases system 1
A
- Representativeness
- Availability
- Anchoring
12
Q
Why are heuristics useful?
A
- Efficient (no resources required)
- They work (most of the time)
13
Q
Heuristics
A
mental shortcuts to satisfactory solutions
