5. Decision Making

Realitvity

• The value of things is “relative” to their context rather absolute

Bandwagon affect

• The tendency to do something because many others do it (or believe the same)

Bias blind spot

• The tendency to not compensate for one’s cognitive biases (Essentially being stubborn)

• Even when you are biased you WILL underestimate it’s effects

Choice-supportive bias

• The tendency to retroactively ascribe positive attributes to an option one has selected

• Older are more likely than young adults to show choice-supportive biases

• Relative to cognitive dissonance

Confirmation bias

• The tendency to search for or interpret information in a way that confirms one’s preconceptions (Basically finding ways to prove your point)

Congruence bias

• The dependency to test hypothesis exclusive through direct testing

Focusing effect

• Placing too much on one aspect of an event

• Also known as the anchoring effect

Hyperbolic discounting

• People generally prefer smaller, sooner payoffs to large, later payoffs

• However when the same payoffs are distant in time, people tend to prefer the large even though the time lag from the smaller to the larger would be the same as before.

Information bias

• The tendency to seek information even when it cannot affect action

Mere exposure effect

• The tendency for people to express undue liking for things merely because they are familiar to them (Zajonc experiments)

Status quo

• The tendency for people to like things to stay relatively the same

Von Restorff effect

• The tendency for an item that “stands out like a sore thumb” to be more likely to be remembered than other items

• South park OJ example

Zero-risk bias

• Preference for reducing a small risk to zero over a greater reduction in a larger risk

• Prefer small benefits that are certain to large ones that are uncertain