Psychology

Question 1

Confirmation bias

Answer 1

We have natural tendency to confirm rather than disprove our own ideas.
George Soros while making financial bets will look for instances thy would make his initial thoery wrongs.
Disconfirming evidences are far more powerful in establishing truths.
U know what is wrong with more confidence than what u know right.

Question 2

Fundamental errors attribution

Answer 2

Belief that behaviour in one context carries over with consisyency in other context.
But studying the error conclude
1.overwirghtage to some general considerations of characters
2.underwieght to power of situations and its direct incentives to compel variety of behaviour.
We shld pay attention to interplay between Situation,Incentives,And NAture of person .we shld never underrate power of incentives and situations.

Question 3

Power of inventives

Answer 3

Ignoring incentives never works out well.
1.OPERANT CONDITIONING
type of learning in which strength of a behaviour is modified by its consequences such as reward or punishment.
Best way to leqrn vomples behaviour is by continous reinforcement.where desired behaviour is reinforced evry time it is performed.
2.INTERMITTENT REINFORCE MENT
Reinforcement that is given only some of times that desired behaviour is occours and it can be done according to schedules some predictable or not.
Intermittent rwinforcement is important from an economic view point by making an reward unpredicatble u trigger excitement.
Its an efficient wqy to maintain an already learnt behaviour.
SCHEDULING REINFORCEMENT
1.Ratio schedules..(no. Of reaponses)
A.Fixed ratio schedules ..on amt. Of work they do
B.Variable ratio schedules..its unpredictable because no.of responses varies..eg sales marketers..it produces more response than other schedules

2.INTERNAL SCHEDULES
Amount of time spent..most common types of payments

Question 4

Loss aversion

Losses looms larger than gains

Answer 4

People became risk seeking when all their options are bad.
People like to avoid sure losses
Losses looms larger than gains.
Our attitudes to risk won’t be different if your network was higher or lower by few thousand dollars.
When directly compared or wieghted agnst each other losses looms larger than gains.
Extreme loss aversion make people loose favourable contract.

Question 5

Loss aversion

Losses looms larger than gains

Answer 5

People became risk seeking when all their options are bad.
People like to avoid sure losses
Losses looms larger than gains.
Our attitudes to risk won’t be different if your network was higher or lower by few thousand dollars.
When directly compared or wieghted agnst each other losses looms larger than gains.
Extreme loss aversion make people loose favourable contract.

Question 6

Endowment effect

Answer 6

Role of loss aversion in bartending also understood..making concessions hurt.
Owning good appeared to increase its value.
Eg goods that r nt regularly traded.
No loss aversion in routine commercial exchange.
Owners who have high reference point for goods (shares) and thus face high losses spend longer time trying to sell their things.
Deprival tendency also works here.
In negotiations people SHLD be reminded of what thy r gaining not what thy r loosing bcz losses looms larger than gains.

Question 7

Hindsight bias(know it all alkng effect)

Answer 7

It occours when we llok backwards in time and see events as more predictable than they were at time when decision were made.