W3 - Evaluation techniques Flashcards
1
Q
Methods of setting price
A
1) certainty effect
2) anchoring & adjustment heuristic
3) framing (loss & gain)
4) paradox of choice
5) sunk cost bias
6) fairness perception
7) risk propensity
2
Q
When a rational economic actors seeks the best expected value FOR ALL PARTIES based on all possible outcomes, weighting the risk and then picking the option with the highest value
A
Expected Utility theory
3
Q
All possibilities are weighed and the best option for YOU is picked
A
Utility Maximisation
4
Q
The notion of being satisfied with the decision made based on meeting some criteria and discarding others
A
Satisficing
5
Q
The sum of loss aversion + endowment effect + loss & gain frames
A
Prospect Theory
6
Q
When the seller knows more than the buyer
A
Lemons Market
