Chapter 2: How People Make Decisions Involving Multiple Objects Flashcards
(40 cards)
What does bounded rationality refer to?
The limitations of the human mind that lead people to use “approximate methods” to deal with decision problems
What do people typically seek in decision-making when using bounded rationality?
Satisfactory, rather than optimal, courses of action
What are the “approximate methods” or rules of thumb used in decision-making called?
Heuristics
How are heuristics adapted in decision-making?
They are often well adapted to the structure of people’s knowledge of the environment
What are quick decision-making methods called, especially when time is limited?
Fast and frugal heuristics
What is a compensatory strategy in decison-making?
A poor performance on some attributes is compensated by good performance on others
What distinguishes a non-compensatory strategy from a compensatory one?
In a non-compensatory strategy, poor performance on some attributes cannot be compensated by good performance on others
What type of strategy involves more cognitive effort?
Compensatory strategies
When is the recognition heuristic used in decision-making?
When people have to choose between two options
What happens when one option is recognized and the other is not in the recognition heuristic?
The recognized option is chosen
In what type of environments does the recognition heuristic work well?
In environments where quality is associated with ease of recognition
What is the first step in the Minimalist strategy for decision-making?
Apply the recognition heuristic
What happens if neither options is recognized in the Minimalist strategy?
Simply guess which is the best option
What do you do if both options are recognized in the Minimalist strategy?
Pick at random one of the attributes of the two option and choose the best performer on this attribute
What happens if both options perform equally well on the chose attribute in the Minimalist strategy?
Pick a second attribute at random, and so on
How is the “Take the last” strategy different from the Minimalist strategy?
People use the attribute that enabled them to choose last time when faced with a similar choice
What happens if both options are equally good on the chosen attribute in the “Take the last” strategy?
Choose the attribute that worked the time before
What happens if none of the previously used attributes works in the “Take the last” strategy?
A random attribute will be tried
When is the Lexicographic strategy used?
When attributes can be ranked in order of importance
What is the first step in the Lexicographic strategy?
Identify the most important attribute and select the option which is best on that attribute
What happens if there’s a tie on the most important attribute in the Lexicographic strategy?
Choose the option which performs best or the second most important attribute, and so on
How is the semi-lexicographic strategy different form the lexicographic strategy?
If options have similar performance on an attribute, they are considered to be tied
What is a potential issue with the semi-lexicographic strategy?
It can lead to a violation of the transitivity axiom
What is the first step in the Elimination by Aspects (EBA) strategy?
Identify the most important attribute and establish a performance cut-off point
