Game Theory
When everyone makes the dominate decision for themselves
Equilibrium
In this domain, the value function is steeper implying we are averse to it.
Loss
Tension when wanting a future outcome but being tempted by immediate options
Self-Control
How and how well people can predict the emotional consequences of future events
Affective Forecasting
What are one of the union demands directly related to student needs?
1) Rent freeze, 2) Allow graduation with fines and charges on the books, 3) Stop selling debts to debt collectors, 4) Change how classes are scheduled
To benefit off of other’s contributions without contributing yourself
Free-Riding
This theory explains the behavior in which we would buy a 2-liter bottle of soda instead of a 20oz bottle when they both cost the same amount
Transaction utility
Outcomes are valued less the farther in the future they are
Time-Discounting
Overestimation of the intensity and duration of emotional reactions to future events
Impact Bias
In experimental economics, subjects are paid based on this.
Their responses
In this game, if me and my partner both make our optimal decision, we both get the smallest reward or largest lose.
The Prisoner's Dilemma
The increased tendency to continue an endeavor because some past investment has been made
Sunk Cost Effect
The Discounted Utility model discounts the value of outcomes this way.
Exponentially
The third step in 'Sense-Making'
Explanation
During this time in a person's life-cycle, they consume too much relative to their income.
Middle-Age (Supp. Thaler, 1990)
Name one of the two assumptions of analyzing decision-making data.
1) People are purely self-interested and 2) People want to maximize their money
Values are coded as gains and losses relative to a reference point
Reference dependence
Higher discount in near future, lower discount rate in distant future
Hyperbolic discounting
People are generally unaware of their psychological immune system defenses
Immune neglect
A bank savings plan in which you are committed to weekly deposits and cannot withdraw until a specific date within the year when all the money is available with interest.
Christmas saving (Supp. Schelling, 1980)
This fails to explain the obvious features of human interaction that we see in game theory.
Instrumental rationality (expected utility maximization)
The manner in which a decision maker interprets a task (or a problem definition) that is involved in making a decision
Task Framing
FREE SPACE
FREE SPACE
This causes the behavior in which we are very opposed to causing harms by intentional action, but tend to be ok with harms caused by accident, even if these harms are slightly more severe
The use of a moral heuristic leading to omission bias
What does the latin word for 'economics' mean?
Household management (Supp. Schelling, 1980)