Week 2: Decision Making & Expertise

Question 1

Define System 1 (intuitive) Thinking

Answer 1

Unconscious
Rapid
Effortless
Linked to emotion

Question 2

Define System 2 (analytical) Thinking

Answer 2

Conscious
Relatively slow
Effortful
Logical (relatively non-emotional)

Question 3

Representativeness Bias

Answer 3

People make judgments about probability based on the degree to which a specific description corresponds to a broader category in their minds.
- Stereotypes

Ex: Linda’s profile is more representative of a feminist than of a bank teller.

Question 4

Recallability Bias

Answer 4

People assess the frequency, probability or likely causes of an event by the degree to which instances or occurrences of that event are easily recalled to memory.

Ex: Some types of death are covered more in the media, so it’s easy to create examples and associate that as truth. If we have a hard time thinking of examples, we tend to think it doesn’t happen often.

Question 5

How Overconfidence Biases Manifests

Answer 5

We can be overconfident with respect to:
Our ability to make accurate estimations (overprecision)
Our performance abilities and our chances of succeeding on specific tasks (overestimation)
How well we perform a given task compared to others (overplacement)
Especially when we lack task expertise

Ex: We would rank ourselves as above-average drivers. All these other bozo drivers around us.

Question 6

Framing Bias

Answer 6

Individuals treat risks concerning perceived gains (e.g., saving jobs and plants) differently than risks concerning perceived losses (e.g., losing jobs and plants).
Perceived losses seem more dramatic than perceived gains.
Individuals will take greater risks trying to avoid losses than they will trying to seek gains.

Question 7

Anchoring

Answer 7

The idea that people can be influenced by the first number that is thrown down.

Ex: What percentage of African countries are in the United Nations? – People would anchor down to the 10 or 65 from the wheel.

Question 8

What Leads to Expertise?

Answer 8

Research suggests that expertise is not inborn; it arises through training, practice and coaching within a given domain.

Question 9

Structured problem

Answer 9

Solution can be mathematically or logically demonstrated

Question 10

Unstructured problem

Answer 10

Solution cannot be “proved”
Which ad slogan to use?
Which new product to launch and when to launch it?