Untitled Quiz
29 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is meant by 'base rate neglect' in decision making?

  • Considering only recent data when making decisions.
  • Focusing solely on personal experiences rather than statistical data.
  • Relying on complex calculations to every decision.
  • Ignoring the overall likelihood or frequency of an event. (correct)

In the given example regarding births in hospitals, why is Hospital A's sample problematic?

  • People were biased towards the assumption of a 50% chance of being born male. (correct)
  • The sample size is too large to draw conclusions.
  • The majority of births in Hospital A were male, which skews the data interpretation.
  • Hospital A had a statistically significant result despite a small sample size.

What role do heuristics play in decision making according to the content?

  • Heuristics are fast and often effective solutions but can lead to biases. (correct)
  • Heuristics are only useful in mathematical and statistical contexts.
  • They eliminate the influence of emotions in decision making.
  • They provide slow and complex solutions to enhance decision accuracy.

Which of the following is an example of a nudge?

<p>Placing healthy foods in prominent areas within a store. (A)</p> Signup and view all the answers

How can biases in decision making be understood according to the provided content?

<p>With models like prospect theory or by examining heuristics. (C)</p> Signup and view all the answers

What defines a decision-making situation?

<p>Alternatives that are mutually exclusive, with future consequences. (B)</p> Signup and view all the answers

In normative approaches, what does expected value (EV) compute?

<p>The average outcome of a decision given various probabilities. (D)</p> Signup and view all the answers

What phenomenon describes people being risk averse in the domain of gains?

<p>They prefer lower but guaranteed rewards over higher-risk options. (C)</p> Signup and view all the answers

What is a common characteristic of the representativeness heuristic?

<p>It results in individuals basing decisions on stereotypes or similarities to known categories. (A)</p> Signup and view all the answers

Which type of decision-making is characterized by biases arising from simplified thinking?

<p>Prescriptive approaches. (B)</p> Signup and view all the answers

What does the availability heuristic rely on?

<p>The probability of an event based on how easily examples come to mind. (A)</p> Signup and view all the answers

What type of choice reflects risk-seeking behavior in decision-making?

<p>Opting for a gamble that offers a higher reward despite a lower probability. (A)</p> Signup and view all the answers

What is commonly misunderstood about decision-making in the presence of heuristics?

<p>Heuristics may lead to systematic errors in judgment. (D)</p> Signup and view all the answers

What is the concept of misjudging a sequence as more 'random' called?

<p>The gambler's fallacy (C)</p> Signup and view all the answers

Which statement illustrates base rate neglect?

<p>Thinking Tom is more likely to be a graduate student in Computer Science based on his description rather than actual data. (D)</p> Signup and view all the answers

Based on the conjunction fallacy, how did subjects rank Linda's likelihood of being a bank teller and an active feminist compared to being just a bank teller?

<p>More likely as bank teller and feminist (D)</p> Signup and view all the answers

What common misconception is evident when people believe the outcomes of events are 'due'?

<p>Gambler’s fallacy (B)</p> Signup and view all the answers

In the example about Tom, what percentage of subjects believed he was more likely to be in Computer Science?

<p>95% (A)</p> Signup and view all the answers

Which of the following best describes the conjunction fallacy?

<p>Assuming that specific information increases likelihood over general information. (D)</p> Signup and view all the answers

Which of these describes an example of the representativeness heuristic?

<p>Judging Tom's likelihood of studying humanities solely on his personality description. (A)</p> Signup and view all the answers

Why do people fall for base rate neglect in decision-making?

<p>They tend to focus on specific instances instead of overall data. (B)</p> Signup and view all the answers

What is the likelihood of rolling five 1s in a row compared to rolling six mixed numbers?

<p>More likely than rolling six mixed numbers (B)</p> Signup and view all the answers

What principle explains why some people believe certain outcomes seem more random than others?

<p>The Representativeness Heuristic (C)</p> Signup and view all the answers

In the context of the Gambler's Fallacy, what is the misconception people have when betting on a fair die after a long series of the same result?

<p>The belief that future rolls are influenced by past rolls (B)</p> Signup and view all the answers

Which of the following describes a common bias when judging probabilities?

<p>Base Rate Neglect (C)</p> Signup and view all the answers

Why might a gambler believe a 6 will come up again after rolling eight 6s consecutively?

<p>They are relying on the trend suggested by previous outcomes (A)</p> Signup and view all the answers

When flipping a coin six times, which sequence is considered to appear less random?

<p>H H H T T T (C)</p> Signup and view all the answers

Which of the following correctly represents the assumption made by people about the regularity of independent events?

<p>Each event must balance out previous events (A)</p> Signup and view all the answers

Which of the following statements about independent events is true?

<p>The outcome of each event is independent of others (D)</p> Signup and view all the answers

Flashcards

Decision-making

Choosing among different options with varying future outcomes.

Expected Value (EV)

The average outcome of a decision, calculated by considering all possible outcomes and their probabilities.

Risk Aversion

Preferring a sure gain over a risky gain with higher expected value, especially when gains are involved.

Risk Seeking

Preferring a risky loss over a sure loss, especially when losses are involved.

Signup and view all the flashcards

Representative Heuristic

Judging something based on how similar it is to a typical example.

Signup and view all the flashcards

Availability Heuristic

Judging something likely based on how easily examples come to mind.

Signup and view all the flashcards

Anchoring and Adjustment Heuristic

Making judgments by starting with an initial value (anchor) and adjusting from there.

Signup and view all the flashcards

Heuristics

Mental shortcuts or rules of thumb people use to make judgments and decisions quickly.

Signup and view all the flashcards

Representativeness Heuristic

Judging the likelihood of something based on how closely it resembles a typical example or prototype.

Signup and view all the flashcards

Gambler's Fallacy

The mistaken belief that past events influence future independent events in chance situations. For example, thinking a coin is 'due' for heads after a streak of tails.

Signup and view all the flashcards

Coin Toss

Each flip of a coin is independent. The previous outcomes do not affect the next flip.

Signup and view all the flashcards

Independent Events

Events that do not influence each other. The outcome of one event does not affect the outcome of another event.

Signup and view all the flashcards

Probability

The likelihood of a specific event occurring. Expressed as a fraction, percentage, or decimal.

Signup and view all the flashcards

Subjective Probability

A personal estimate of the likelihood of an event based on intuition, experience, and biases.

Signup and view all the flashcards

Objective Probability

The actual likelihood of an event occurring based on mathematical calculations and empirical evidence.

Signup and view all the flashcards

The 'Law' of Averages

The mistaken belief that a random event (like flipping a coin) will balance out over time. Random events are independent.

Signup and view all the flashcards

Hot Hand Fallacy

The misconception that streaks of success or failure in random events are more likely to continue, even though the events are statistically independent.

Signup and view all the flashcards

Conjunction Fallacy

Judging a conjunction of events more likely than one of the events alone, even when the conjunction is logically impossible to be more likely.

Signup and view all the flashcards

Base Rate Neglect

Ignoring or underweighting prior probabilities when making judgments about the likelihood of an event.

Signup and view all the flashcards

Subsumed

In probability, one event is 'subsumed' under another event if it is a subset of it, meaning that if the first event occurs, the second event must also occur.

Signup and view all the flashcards

Sample Size Neglect

Ignoring the size of the sample when making judgments about the overall population.

Signup and view all the flashcards

Nudges

Small changes in the environment that can influence people's choices without restricting their freedom.

Signup and view all the flashcards

Prisoners Dilemma

A game theory scenario in which two individuals act in their own self-interest, leading to a worse outcome for both.

Signup and view all the flashcards

Study Notes

Judgment & Decision-Making

  • Decision-making involves choosing among alternatives with mutually exclusive options, considering future consequences and different values

  • Decision-making is prevalent in daily life

  • Normative approaches to decision-making involve calculating expected value (EV)

  • EV is the average cost of winning plus the average cost of losing in a scenario with various possible outcomes and probabilities

  • Descriptive approaches acknowledge risk aversion in gains and risk-seeking in losses

  • People tend to prefer guaranteed gains over risky gains and avoid guaranteed losses over risky losses

  • Prescriptive approaches explore heuristics and biases

  • Biases in judgments reveal heuristics underlying decisions in uncertain situations

  • Several heuristics and biases impact decision-making

  • Representativeness heuristic: judgments of probability heavily influenced by how similar an event seems to prior beliefs or prototypes

  • Availability heuristic: estimates of frequency or probability are influenced by ease of recall

  • Anchoring and adjustment heuristic: initial values (anchors) heavily influence subsequent judgments; adjustments are often insufficiently substantial

  • The Gambler's Fallacy: The misconception that outcomes of random events are influenced by previous outcomes

  • The Conjunction Fallacy: The tendency to mistakenly believe that two events are more likely than one event when one event is part of the other

  • Base Rate Neglect: Neglecting the base probability of an event when making judgments based on related information

  • Ignoring the sample size: making judgments about probabilities, based on insufficient sample size.

  • Decision Architecture: Design of environments to encourage or discourage specific choices

  • Nudges: subtle changes to decision environments aimed at increasing adoption of specific choices

  • Game Theory: Studies how rational individuals make decisions when interdependent outcomes are anticipated

  • Intertemporal Choice: Decisions involving choices between outcomes occurring at different points in time

  • Emotions: factors influencing decision-making processes

  • Availability Heuristic: estimates of frequency or probability are influenced by ease of recall

  • Examples of the Availability heuristic include determining the frequency of words or the number of men or women on a list.

  • Anchoring and adjustment heuristic: initial values (anchors) heavily influence subsequent judgments; adjustments are often insufficiently substantial

  • Example of anchoring and adjustment: participants estimating probability of UN member country being African after being shown a random number. Random number impacts probability estimates

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Judgment & Decision-Making Chapter 13 PDF

More Like This

Untitled Quiz
6 questions

Untitled Quiz

AdoredHealing avatar
AdoredHealing
Untitled Quiz
37 questions

Untitled Quiz

WellReceivedSquirrel7948 avatar
WellReceivedSquirrel7948
Untitled Quiz
55 questions

Untitled Quiz

StatuesquePrimrose avatar
StatuesquePrimrose
Untitled Quiz
48 questions

Untitled Quiz

StraightforwardStatueOfLiberty avatar
StraightforwardStatueOfLiberty
Use Quizgecko on...
Browser
Open
Browser
Browser