Lecture on Judgment, Decision Making, and Heuristics

These flashcards cover key concepts from a lecture on judgment and decision-making, focusing on cognitive biases and heuristics.

Sunk Cost Fallacy

The tendency to continue an endeavor once an investment in money, effort, or time has been made, even if it no longer makes sense.

Endowment Effect

The phenomenon where ownership increases the perceived value of an item, making individuals less willing to give it up.

Framing

The context or perspective from which information is presented, which influences decision-making and judgment.

Heuristic

A mental shortcut or rule of thumb that simplifies decision making but can lead to errors.

Availability Heuristic

A cognitive bias that causes people to overestimate the importance of information that is readily available or recent.

Representative Heuristic

A cognitive bias that involves judging the likelihood of an event based on how much it resembles a typical case.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Anchoring Heuristic

The cognitive bias where individuals rely too heavily on the first piece of information encountered (the "anchor") when making decisions.

Conjunction Fallacy

The error of assuming that specific conditions are more probable than a single general one.

Heuristics in Decision Making

Cognitive processes utilized to simplify decision-making, often leading to systematic biases.