Other Flashcards
(10 cards)
- What is an example of transference in client-planner communication?
A. The planner feeling frustrated with the client’s inaction
B. The client transferring feelings from a past experience with a financial advisor to the current planner
C. The client answering questions without hesitation
D. The planner asking about the client’s financial goals
E. The client showing excitement about new investment opportunities
b
- Word processing applications like Microsoft Word have been redesigned to automatically save versions
of a document. That is because in the past people would forget to save the document before closing the
application, losing all their work. This redesigned system uses what kind of choice architecture tool?
A. Defaults
B. Feedback
C. Error expectancy
D. Mapping
E. Post-completion alerts
c
- Automatically enrollment for prescription refills, as a way to encourage taking medication, is an
example of a(n) __________________ nudge.
A. discouraging, externally-imposed
B. encouraging, externally-imposed
C. encouraging, self-imposed
D. discouraging, self-imposed
E. self-control boosting, mindful
b
- Which of the following is an example of an implied or indirect question?
A. “How do you feel about the stock market?”
B. “Why do you want to invest in real estate?”
C. “I wonder what your retirement plans might look like?”
D. “What kind of investments do you want to make?”
E. “Is it possible for you to increase your savings rate?”
c
- Which of the following best represents a “discouraging” nudge?
A. Installing a car dashboard that tracks mileage to reduce fuel consumption
B. Providing a simplified application process to encourage college enrollment
C. Placing unhealthy foods in harder-to-reach areas to discourage consumption
D. Giving people rewards for recycling
E. Encouraging people to save by providing higher interest rates
c
- Which of the following is the correct match between a segment of the intention-action gap (Gap 1) and
its corresponding strategy?
I. Motivational Enthusiasts: reinforce positive behaviours
II. Diehard Opponents: choice architecture interventions
III. Naïve intenders: behavioural crutches
A. I and II
B. II and III
C. I and III
D. I, II, and III
E. None of the above
c
- Understanding ___________________________ is an important factor to consider during the change
process because clients have a natural propensity towards growth and change and with proper support,
have the ability to make positive changes. Planners can harness this to facilitate change.
A. Internal motivation
B. Passive compliance
C. Resistance
D. Ambivalence
E. Externalized incentives
a
What are the two categories of debiasing?
Modify the Decision Maker (Person-Based Strategies)
Modify the Environment (Task-Based Strategies)
Name me the 4 debiasing strategies under modify the decision maker
- Education & training (JIT too)
What: Teach key principles from statistics, economics, and probability.
Example: Teaching the “rule of 72” to explain compound interest so people understand how investments grow exponentially, not linearly.
🔹 Cognitive techniques
Generate more alternatives (objective-by-objective)
What: Listing decision objectives one at a time helps uncover more creative solutions.
Example: When choosing a job, list one goal at a time (e.g., salary, location, growth) and brainstorm options for each.
“Think of the opposite” / Pre-mortem analysis
What: Imagine your decision fails and work backward to find causes.
Example: Before launching a startup, ask, “Why might this fail in 5 years?” to uncover hidden risks.
Average multiple independent estimates (“crowd within”)
What: Make a judgment twice (e.g., with a time delay or different mindset) and average them.
Example: Forecast sales for a product today, then again tomorrow, and average both to improve accuracy.
Dialectical bootstrapping
What: After making an estimate, assume it’s wrong and come up with a second answer.
Example: Predict next month’s expenses, then assume you’re off — why? — and make a second estimate.
🔹 Better uncertainty estimates
Use 10th/50th/90th percentiles
What: Break down uncertainty into low, median, and high cases.
Example: “I’m 90% sure my house will sell between $480K (10%) and $550K (90%), with a midpoint of $510K.”
Assign probabilities to bins
What: Allocate likelihoods to a range of outcomes.
Example: Predicting interest rates:
0–2% → 10% chance
2–4% → 50%
4–6% → 40%
Time-unpack long forecasts
What: Predict in steps rather than all at once.
Example: To forecast stock performance 6 months out, first forecast 1-month and 3-month trends, then combine.
🔹 Replace intuition with models
Linear / equal-weight models
What: Add up key factors using equal weights to guide decisions.
Example: Hiring decision = (GPA + Interview score + Experience level) / 3.
Other formal decision tools
What: Use structured methods like checklists, decision trees, or algorithms.
Example: A medical team uses a scoring tool to assess stroke risk rather than relying on intuition.
Tell me the 5 debiasing strategy for modifying the environment
Incentives: Financial or social rewards and accountability
Choice Architecture Nudges:
Defaults / Smart defaults
Active choice requirements
Planning prompts
Planned interruptions (e.g., partitioning snacks or wages)
Future-Focused Nudges:
Choose in advance
Precommitment contracts
Temptation bundling
Shaping Information Presentation:
Transform the scale (e.g., GPHM instead of MPG)
Expand the scale (e.g., 5-year cost, not monthly)
Frame messages as gains or losses
Use visuals for probabilities (icon arrays, charts)
Provide social-norm comparisons
Organizational Repairs:
Use checklists, critical review routines, shared stories of failure
