Judgement and Decision Making

bounded rationality

model of human behavior that suggests that humans try to make rational decisions but are bounded due to cognitive limitations

biases

the systematic and predictable mistakes that influence the judgment of even very talented human beings

heuristics

cognitive (or thinking) strategies that simplify decision making by using mental shortcuts

overconfident

the bias to have greater confidence in your judgment that is warranted based on a rational assessment

anchor

the bias to be affected by an initial anchor, even if the anchor is arbitrary, and to insufficiently adjust our judgments away from that anchor

framing

the bias to be systematically affected by the way in which information is presented, while holding the objective information constant

willpower is bounded

the tendency to place greater weight on present concerns rather than future concerns

self-interest is bounded

the systematic ways in which our ethics are limited in ways we are not even aware of ourselves

system 1

our intuitive decision-making system, which is typically fast, automatic, effortless, implicit, and emotional

system 2

our more deliberative decision-making system, which is slower, conscious, effortful, explicit, and logical