PSYC100 - Psychology & Economic Decision Making

describe anchoring

type of cognitive bias where the first piece of information you are given biases you

describe endowment effect

we tend to overestimate how much our stuff is worth, the stuff you own is valued higher than when it is not yours.

- how much are you willing to sell your sneakers for?

- mug study (value 2x more than a pen when its yours)

describes losses vs gains

- pain from loss (more)

- pain from gain (less)

describe compromise effect

context effects on choice. introducing a decoy item will create a simple comparison with one option and thereby make it appear superior. we often don't know what we want until we see it in some context.

describe attraction effect

an item can increase the favorable perceptions of similar, but superior, items. putting something next to a less attractive thing makes the other thing slightly more attractive