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what is the psychological dashboard
prospect theory
value meter
emotions
heuristics
mind X environment
how does behavior emerges
from interacting psychological systems (heuristics and emotions)
what does the prospect theory explain
how people actually evaluate choices involving risk
what does the value meter determine
whether we feel safe or threatened
what is a prospect
a decision involving uncertain outcomes
what question is asked in prospect theory
what feels like a gain or a loss
once smt is labeled a gain or a loss…
the rules of value change
how are outcomes coded
as gains or losses relative to a reference point
where do reference points come from
identity
norms
expectations
social comparisons
same outcome can be…
differently seen depending on the person and their references
once outcomes become gains or losses…
the same outcome can feel safe or threatening
change of how value itself is experienced
predicts a systematic shift in risk behavior
how is value judged
relative to a reference point (not absolute outcomes)
how is the value function shaped
S-shaped
how are gains seen in the value function
diminishing emotional impact, the safer choice
how are losses seen in the value function
strong emotional urgency, riskier choices
what is loss aversion
losses are psychologically steeper than gains
what motivates bold actions
recovering status after embarrassment
gains produce…
diminishes emotional excitement
which feel like a huge gain 60%-70% or 90%-100%
60%-70%
do people prefer smaller certain gains or larger uncertain ones
smaller certain gains
when do people protect what they have
when the outcomes feel positive
when do risks become attractive
when it offers escape from loss
losses are how much more powerful than equivalent gains
x2
negative feedback outweighs what
praise
rejection hurts more than…
acceptance feels good
threat information dominates what
attention and memory
do people require larger gains to accept losses of equal size
Most participants reject gambles unless potential gains are nearly double losses
what is ownership psychology or endowment effect
owning smt makes giving it up feel like a loss, selling prices become x2 higher than buying prices
why does the endowment effect happen
psychological ownership drives preference therefore when smt becomes mine, giving it up feels like a loss
moral judgments often follow…
loss framing
what is the loss frame
smt is taken away
strong emotional response
feels unfair or violating
triggers moral outrage
what is the missed gain frame
nothing is taken away
mild emotional response
feels acceptable or neutral
little moral judgment
what can influence the value of smt
based on the framing language used
what is the reference points of gain frames
risk avoidance
what is the reference points of loss frame
risk seeking
why does escalating happens
losses accumulate psychologically
extended time in a loss domain increases risk taking
why does the same outcome feel like a gain to one person and a loss to another
because outcomes are judged relative to reference points shaped by identity, norms, and expectations
why are losses so psychologically powerful
because the value function is steeper for losses, they carry greater emotional and motivational weight
why does wording flip decisions
because framing shifts the psychological domain (gain vs loss), and risk preferences change accordingly
how can we then change a behavior
change reference point
change emotion
change goals
change behavior
which type of pamphlet produced effects on attitudes towards BSE
loss-framed pamphlets
how did loss framing change the reference point of BSE
to normal being proactive self-screening, making inaction feel like a loss
how does gain framing change the reference point of bse
inaction is the default or normal state, performing the behavior becomes a gain relative to that baseline but also a risk
too much fear can cause…
avoidance
which brochure outperformed the other ones in key outcomes in the sun safety messages
gain frames brochures
what were the key outcomes that gain brochure did
requesting sunscreen samples
intentions to repeatedly apply sunscreen at the beach
intentions to use spf higher than 15
why would loss frames motivate one health behavior but gain frames motivate another
framing works by matching the psychological risk structure of the behavior
why does detection/ screening behaviors work best with a loss framing
the action could reveal bad news
doing the action feels risky or threatening
if the behaviour helps detect a potential problem, emphasize could be lost by not acting
why does gain framinf works better for preventing behaviors
the action simply maintains health
outcomes feels predictable and protective
if the behavior helps maintain health, emphasize the benefits gained by acting
what does the prospect theory explain about the different types of framing
when people feel they might lose smt important, they become motivated to avoid that loss
when people feel they are maintaining gains, they prefer safe and protective actions
why does default automatic enrollment shape behavior
people treat the default as an implicit recommendation and are reluctant to change it, making retirement saving the status quo
how does auto-enrollment flips the reference point
im saving unless i actively stop
how does auto-enrolment frame opting out
feels like losing future financial security, increasing loss aversion
what are the mechanisms/ forces that drive default effects
legitimacy cue
inertia
both are tied to heuristics and self-control
what is the legitimacy cue
the default seems like advice
what is inertia
changing requires effort
what are the 3 psychological reasons why environment matter
attention is limited→ we rely on cues in the decision environment
reference points shape evaluation → outcomes feel like gains or losses
effort and friction matter → people follow the path of least resistance
what is decision environment
the surroundings where a person makes a choice is shaped by the options presented, the effort required, and the cues and norms that guide their decisions
what is the cafeteria problem
food placement strongly influences student choices. items at eye level or line ends are chosen more often
what is choice architecture
how decision environments present options
what is default
what happens if people do nothing
why do defaults influence behavior
inertia
effort avoidance (people follow path of least resistance)
perceived recommendation (default seen as advice from expert or institution)
what is the status quo bias
the tendency to stick with the default option
what are opt-in systems
people must actively register as donors
participation remains relatively low
what are opt-out systems
people are donors unless they decline
participation rates often exceed 90%
countries with opt-out defaults have…
dramatically higher donor rates
what is friction
effort required to act
what are some common sources of friction
complex forms
multiple steps
unclear instructions
reducing friction dramatically…
increases participation
Does simplifying the federal application for financial aid (FAFSA) + giving personalized aid info increase FAFSA filing and college enrollment?
simplification works, info alone doesnt
reducing complexity increased participation (less friction closes the gap between intentions and actions
what is salience
what attracts attention
what are some examples of salience cues
reminders
visible incentives
comparison feedback
what kind of info do people responds more strongly to
that is visible and noticeable
how do norm messages communicate
descriptive norms
what people actually do
injunctive norms
what people approve of
which norm tends to be especially powerful
descriptive norms
what is a nudge
small change in how a choice is presented that steers people towards a behavior without restricting options or changing financial incentives
not all decisions are equally nudgeable
when do nudges work best
preferences are weak or unstable
decisions are complex
people are uncertain
nudges work poorly when
preferences are strong
identity is involved
structural barriers exist
social influence refers to how people affect
what we think
how we feel
what we do
what are the two main forms of social influence
compliance and conformity
what is compliance
agreeing to a request
what is conformity
adjusting behavior to match others
what are the 3 goals that social influence works
accuracy
wanting to interpret situations correctly
affiliation
wanting to belong and maintain relationships
positive self-concepts
wanting to see ourselves ads good and consistent people
how are social norms shared
with expectations about how people behave within a group
what do norms share in common
norms are social
they emerge from interactions among people
norms guide action
they shape decisions and behavior
norms help maintain social order
how can norms also support harmful behaviors
binge drinking culture
discrimination
unhealthy consumption norms
what are the 2 ways norms can influence behavior
direct influence
indirect influence
what is direct influence
people follow norms automatically
norm itself guides behavior
standing in line without thinking
what is indirect influence
norms shape behavior through other factors
attitudes
intentions
perceived costs and benefits
situational constraints
supporting recycling but not doing it when its inconvenient
norma influence behavior through 3 main pathways
information
other behavior tells us what is effective or appropriate
social pressure
people want to avoid judgment, exclusion or embarrassment
internalization
norms become part of our values and identity
what are the 2 types of norms
descriptive
what people actually do
injunctive
what people approve or disapprove of
what they should do
how do injunctive norms work
through anticipated approval, disapproval, guilt, shame, and moral evaluation
when are injunctive norms specially powerful
behavior is visible to others
social relationship matter
identity and reputation are at stake
how do descriptive norms influence behavior
social proof
what is social proof
people use others behavior as evidence of what is correct, effective or sensible
what is a heuristic shortcut of descriptive norms
if many people are doing this, it must be the right thing to do
when do descriptive norms work especially well
situations are uncertain
decisions are quick
motivation to think deeply is low
which norm or people more likely to follow (study on this room)
the one that best matched their immediate situation, event though it came from the least personally meaningful group
same room norm
which social norms increase fake news reporting
combined norms
people should do this
people are doing this
when do norm messages backfire
when they communicate a descriptive norm and imply the behavior is common