PSY 324 - Units 14/15

What do Normative Models expect?

how we ought to behave if we are perfect, rational beings

What do Descriptive Models ask?

what the real decision is that humans make since they are not perfect beings

What does Expected Value Theory suggest, and which model does it obey?

that we follow what the math says; normative

What does Expected Utility Theory do, and which model does it obey?

it provides us room to make decisions as long as we are consistent in them; normative

What does Prospect Theory suggest, and what model does it obey?

subjective probability; descriptive

What does Regret Theory suggest, and what model does it obey?

we make decisions in the interest of avoiding regret; descriptive

What does the Transivity Principle suggest?

if A is preferred over B, and B is preferred over C, than A is preferred over C

What does the Non-Contradiction Principle suggest?

if you like A more than B, then you will not choose B over A; consistency with decisions

What is the violation of Normative Principles?

our preferences between two or more options may not be end all be all

What is the difference between being Risk seeking versus being Risk Averse?

risk seeking is loss framing; risk aversion is gain framing

What does the Availability Heuristic say we are biased to?

to whatever comes to mind most readily; often by our most recent experiences

What does the Representativeness Heuristic suggest?

that your brain will judge how similar something is to a particular category based on an example of that category you have in your head

What does the Anchoring & Adjustment Heuristic suggest?

that people make estimates on the basis of a starting point, and adjust from that point with new information (salesman example)

What does the Simulation Heuristic suggest?

that if we are confronted with a situation, our understanding of it may be influenced by our tendency to go back to events in the past and see how they could’ve been different

What does the Conjunction Fallacy suggest?

that we incorrectly assume that two events happening together are more probable than either event happening alone

What does the Fast and Frugal Theory suggest?

it emphasizes the successes of heuristics

What is meant by Optimizing?

to search every option available

What is meant by Satisficing?

to search some of the options and choose one that is good enough

What is meant by Elimination by Aspects?

making a decision between a number of outcomes, allow decision to make itself by process of elimination of what the worst outcomes are