Decision making: choices and chances Flashcards Preview

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Flashcards in Decision making: choices and chances Deck (7)
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1

What is decision making?

Decision making involves evaluating alternatives and making choices among
them.

2

What is Simon's theory of bounded rationality

Simon’s theory of bounded rationality
asserts that people tend to use simple strategies in decision making that focus on only a few facets of available options and often result in “irrational” decisions that are less than optimal.

3

What is risky decision making?

risky decision making, which involves making choices under conditions of uncertainty.
 

4

What is the availability heuristic?

The availability heuristic involves basing the
estimated probability of an event on the ease with which relevant instances come
to mind.

5

What is the representativeness heuristic?

The representativeness heuristic involves basing the
estimated probability of an event on how similar it is to the typical prototype of that
event

6

What is the conjunction fallacy?

The conjunction fallacy occurs when people estimate that
the odds of two uncertain events happening together are greater
than the odds of either event happening alone

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