JUDGMENT & DECISION-MAKING

Judgment

A conclusion drawn from available information.

Decision

A choice that influences behavior.

System 2 processing

Slow, deliberate, effortful thinking.

Algorithm

A step-by-step method that guarantees a solution.

Heuristic

Mental shortcut that is fast and efficient but does not guarantee accuracy.

Conjunction fallacy

Belief that two events together are more likely than either alone.

Representativeness heuristic

Judging probability based on similarity to a prototype, not actual likelihood.

Framing effect

Decisions change depending on how information is presented (saved vs. died).

Prospect theory

People are risk-averse for gains and risk-seeking for losses.

System 1 processing

Fast, automatic, low-effort thinking