Probability
When we think of our current problem as a member of a category of many similar problems, are we taking an Outside or Inside View?
Outside View
What do we call the degree to which our confidence maps on to accuracy?
Calibration
Strategies that involve across-attribute trade offs between alternatives are called what?
Compensatory
What is the position (0,0) on the value function representing?
The Reference Point
In what type of frame are people usually risk-seeking?
A Loss Frame
What type of probability do we call the likelihood of two simple events both occurring?
Conjunctive Probability
Why is the idea of a "hot hand" in basketball often fallacious?
Regression to the mean
When will a decision task require more cognitive effort?
Answer one of these:
-Large choice sets
-Necessary trade-offs across alternatives
-A lack of critical information
-Having many similar alternatives
Around 0.20
In the 'General Problem', when are people typically risk-averse?
When the problem is framed as saving lives, opposed to losing lives.
In the Monty Hall Problem, what is the probability that you will receive the car if you switch to the other door?
2/3
When plotting confidence, how would we describe the data points that fall below the slanted dotted line? (i.e., over or under confident)
Over-confident
Which decision strategies (categorically) are susceptible to Order Effects?
Non-Exhaustive Strategies
Why is the value function curve steeper moving left from the reference point, as opposed to right?
Loss Aversion (i.e., losses are weighted greater than gains)
What do we call the phenomenon in which people ascribe more value to things simply because they own them?
The Endowment Effect
Explain the denominator in Bayes' formula.
P(B) is the independent probability of B occurring, regardless if A occurs or not.
According to the Hard-Easy Effect, what types of questions often lead to under-confidence?
Easy Questions
What is the most cognitively demanding decision strategy?
Additive Linear, or
Multi-attribute Utility Theory
How do we determine the value of a Prospect?
The overall value of a prospect is equal to the sum of all its individual values multiplied by their decision weights
Framing Effects often use "Reference Point Manipulation" to affect the perception of potential outcomes. What axiom of rationality does this violate?
Axiom of Invariance
In what type of probability are we are trying to account for the "inclusive or" between events?
Disjunction
When are Better than Average (BTA) and Worse than Average (WTA) effects the strongest?
When we are confident about our own performances but unsure about others.
What is the difference between the Conjunctive (i.e., Satisficing) and the Disjunctive decision strategies?
In Conjunctive, you select based upon finding an alternative that meet the cut-offs on all attributes. In Disjunctive, you select based upon finding an alternative that meets the cut-off on any attribute.
Why does is make sense to combine/segregate our outcomes?
We are more sensitive gains/losses near our reference point. Segregating gains and grouping losses can increase overall satisfaction.
How does buying insurance demonstrate a departure from typical framing effects?
People are usually risk seeking in a loss frame. However, with phone insurance, most people take the sure loss of $50 to avoid the potential (i.e., risk) of losing $200 in the future.