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Flashcards in MGT491 Mid Term Deck (193):
1

System 1 thinking refers to:

a. Our intuitive system, which is typically fast, automatic, effortless, implicit, and emotional
b. Reasoning that is slower, conscious, effortful, explicit and logical
c. a single system whose sole function is to control our cardiovascular functions
d. none of the above

A

2

Which was of the following is NOT one of the primary steps in the PrOACT method of decision making?

a. Define the problem
b. Identity the objectives
c. Assess the emotional factors in the decision
d. Generate alternatives
e. Rate each alternative on each objective

C

3

What are the steps in PrOACT

Problem
Objectives
Alternatives
Consequences
Tradeoff

4

What part of PrOACT is when you carefully and be sure to state your decision problem carefully

Problem

5

What part of PrOACT is when the decision is a means to an end, you want to ask yourself what to accomplish in making this decision

Objectives

6

What part of PrOACT is when the response the different choruses of action you have to choose from, and think creatively in order to specify all possible alternatives

Alternatives

7

What part of PrOACT is when you make sure understand the outcome of each alternative

Consequences

8

What part of PrOACT is because objectives frequently conflict with one another

Trade offs

9

What is an intuitive system, fast, automatic, effortless, implicit, and emotional.

Most decisions made using this system

System 1

10

What is the reasoning that is slower, conscious, effort, explicit, and logical

System 2

11

*Detecting the one objective is more distant than another

*Orient to the source of a sudden sound

*Detect a hostility in a voice

*Drive a car on an empty road

System 1 Activities

12

*Brace for the starting gun in a race.

*Look for a woman with white hair.

*Telling someone your phone number

*fill out tax Form.

*Compare two washing machines for overall value

System 2 Activities

13

What is the idea that in decision making, rationality of individuals ins limited by the information they have, the cognitive limitations of their minds, and the amount of time they have to make decision.

Bound Rationality

14

Most people are only partly rational, and emotional.irrational in remaining part of their action

Boundly rational agents experience limited information and solving complex problem in processing

Herbert Simon

15

What is not
*optimization under constraints
*irrationality

Bounded Rationality

16

What it is:
*simple heuristic decision tools that are specific and effective in certain environments.

Fast, Frugal, and accurate decision rules.

Process by which we use to make decisions
*Fast
*not hard decisions

Bounded Rationality

17

What is a decision-making strategy that attempts to meet an acceptability theirs hold. This contracted with optimal decision making, an approach hat specifically attempts to find the best options available. May often be optimal if the costs of the decision-making process itself, such as cost of obtaining complete information, are considered in the outcome calculation.

Satisfice

18

What is it when if everyone in every organization were completely rational, they would not always make the best decision.

satisficing

19

What is a given the time, effort , and expense that must go into the process of generating and evaluation alternatives, and the decision-making process within manageable bounds and stops the process when an acceptable solutions have been identified.

Satisficing

20

In the context of bounded rationality, the term satisfice is defined as:

a. A decision maker will continue to search for the best solution and will not stop until she is satisfied that best solution has been found

b. Decision makers are often willing to forgo the best solution in favor of one that is acceptable or reasonable

c. Satisfice is research term used to measure how satisfied a decision maker is with a decision after the decision has been made.

d. Both A and C are correct

B

21

What is mental capacity, time, attention, information/knowledge

Bounded rationality

22

The fact that heavy advertising of a company’s or a product’s name on billboards and in the media makes that name stick in people’s memory as bearing high quality is an example of what bias?

a. Insensitivity to base rates.
b. Retrievability.
c. The conjunction fallacy.
d. Ease of recall.

E

23

What is when assessing the likelihood of events, individual, tend to ignore base rate.

insesitivity to base rates

24

What is an individuals are biased in their assessment of the frequency of event based on how their memory structures effects the search process.

Retriebability

25

What is an individual exhibits bias toward overestimating the probability of conjunctive events and understanding the probability of disjunctive events.

The conjunction Fallacy

26

What is an individual judge events that are more easily recalled from memory.

Ease of Recall

27

What is the applies when a decision maker must choose be between two or more prospects.

Expected Value

28

What says a decision maker should select the prospect with the highest expected value

Expected Values

29

What is a way to measure the relative merits of decision alternatives.

Mathematical combination of playoff and probabilities you calculate the expected value after all probabilities and play off value are identified.

Expected Values

30

Of 12 eggs are ordered every Thursday morning, in the long run, a profit of $4 will be realized in 1 week, a profit of $14 in 2, and a profit of $24 in 7 out of 10 weeks. What is the expected profit?

(4)(.1)+(14)(.2)+(24)(.7)=
.4 + 2.8 + 16.8
20

31

What is an economic term summarizing the utility that an entry or aggregate economy is expected to reach under any number of circumstance.

Expected Utility

32

What is calculated by taking the weighted average of all possible outcomes under certain circumstance with the weights being assigned by the likelihood, or probability, that any particular event will occur.

Expected Utility

33

Suppose one offer you the choice between the following two gambles:

Gamble A: Win $240 at 100%

Gamble B: Win $400 at 50%
Win $100 at 50%

Show that an expected value maximizer will choose What Gamble

Gamble B

EV of A: 240 (240)(1)

EV of B (.5)(400) + (.5)(100)
200 + 50
250
EUA is square root of 240 is 15.49

EUB (.5)(Square Root of 400) + (.5)(Square Root of 100)
(.5)(20) + (.5)(10)
10 + 5

The choose is B because gamble B is lower

34

What is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower expected payoff.

Risk Aversion

35

What type of decision maker choose to put their money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have expected return but also involves a change of losing value

Risk Aversion

36

The utility of $40 for sure is worth more that a 50% chance at $80. What type of decision maker is this type of person

Risk Aversion

(u)80= 66

(80)(.5) + (0)(,5)
33+0
33

37

What is the preference are neither risk averse or risk seeking. This type of decision maker party decision are not affected by the decree of uncertainty in the set of outcomes, so a risk neutral party is indifferent between choices with equal expected payoff even if one choice is riskier.

Risk Neutral

38

The utility of $40 for sure is worth more than a 50% chance at $80. What type of decision maker is this type of person

Risk Natural

U(80)
(80)(.5) + (0)(.5)
40 + 0
40

40=40

39

What type of decision maker is a person who has a preference for risk.

*Under uncertainty is ofter characterized as the maximization of expected value

Risk Seeking

40

The utility of $40 for sure is worth more than a 50% chance at $80. What type of decision maker is this person

Risk Seeking

U(80) = 93
(93)(.5) + (0)(.5)
46.5 + 0
46.5

41

What is a paradox related to probability theory and decision theory.

*it is based on a particular (theoretical) lottery game that leads to a random variable with infinite expected value

*is a classical situation where a native decision criterion (which takes only the expected value into account) would recommend a course of action that no rational person would be will to take.

St. Petersburg Paradox

42

What is the statistical process for estimating the relationship among variables

*is widely used for prediction and forecasting where its used has substantial overlap with the field machine learning.

*also used to understand which among the independent variables are related to the dependent variable.

Regression Analysis

43

What is the values of money with a given amount of interest earning or inflation accrued over a given amount of time.

Time Value of Money

44

What is the current worth of a future sum of money or stream of cash flow given a specified rate of return.

Present Value

45

What is the value of an asset or cash at a specific date in the future that is equivalent in value to a specific sum today.

Future Value

46

Consider an investment that will pay $680 per month for the next 15 years and will be worth $28000 at the end of that time. How much is this investment worth to you today @ 5.25% discount rate?

P/y= 12
N= 15*12= 180
I= 5.25
PMT= 680

FV= 28000
PV= -97351.34

47

What is a decision support tool that is uses a tree-like graph or model of decision and their possible consequences including chance event outcomes, resource costs, and utility.

Decision Tree

48

Which of the following can serve as a cognitive explanation for misconceptions of chance?


a. People expect probabilities to even out.
b. People remember unusual sequences better than ones that appear more random.
c. People judge probabilities of future events as contingent on past events.
d. All of the above.

D

49

What is an individual expect that a sequence of data generated by a random process will look random even when sequence is too short for those exceptions.

Misconception of chance

50

What is a cognitive bias according to which better informed people find it extremely difficult to think about problems

The curse of Knowledge

51

What is an individuals tend to seek confirmatory information for what they think is true and fail to search for dis confirmatory evidence.

The confirmation Trap

52

What is the tend to be overconfident of the correctness of their judgment, answering difficult questions.

Overconfidence

53

Drake is a department manager in a company which has recently decided to hire a new analyst. After interviewing all candidates, Drake recommended the company hire Anne, but senior management preferred to hire Beth. Drake argued that Beth is an inferior choice, but agreed to accept her for a trial period of six months. At the end of the trial period, Drake evaluated Beth’s performance as poor. Although this evaluation may have been fair, it is also possible that it was biased by:

a. The curse of knowledge.
b. The confirmation trap.
c. Overconfidence.
d. Misconceptions of chance.

B

54

The human mind is better at remembering information that is

a. Interesting.
b. Emotionally arousing.
c. Recently acquired.
d. All of the above.

D

55

When negotiating for salary with a future employer, it is wise to make an initial offer that is ______, because of the anchoring bias

a. Low
b. High
c. It is best not to make the first offer
d. None of the above

B

56

What describes the inferences we make about event commonness based on the ease with which we can remember instances of that event

Availability Heuristic

57

What assess the frequency of a class or the probability of an event by the ease with which instances or occurrences can be bought to mind.

Availability Heuristic

58

What is an individuals judge events that are more easily recalled from memory, based on vividness or recency, to be more numerous than events of equal frequency whose instances are less easily recalled

Easy of Recall

59

What is an individuals are biased in their assessments of the frequency of events based on how their memory structures affect the search process.

Retrievability

60

What is it when making a judgement about an individual people tend to look for traits an individual may have that correspond with previously formed stereotype.

Representativeness

61

When assessing the likelihood of events individuals tend to ignore base rate if any other descriptive information is provided.

Insensitivity to Base Rate

62

When assessing the reliability of sample information individual frequently fail to appreciate the role of sample size

Insensitivity to Sample Size

63

When is the individual expect that a sequence of data generated by a random process will look random even when the sequence is too short for those expectations to be statistically valid.

Misconceptions of Chance

64

When an individuals tend to ignore the fact that extreme events tend to regress to the mean on subsequent trails.

The regression to the Mean

65

When an individual falsely that conjunctions are more global set of occurrences of which the conjunctions is a subset.

The conjunction fallacy

66

What is a winning streak, a lucky spell

Hot Hand

67

Whats is the mistaken belief if something happens more frequently than normal during some periods, then it will happen less frequently in the future.

Gambler's Fallacy

68

What relates the conditional and marginal probabilities of events A and B,, where B has non-banishing probability

Bayes Theorem

69

What is a tendency to search for or interpret new information in a way that confirms one's preconceptions and avoids information and interpretations which contradict prior beliefs.

Confirmation Heuristic

70

When is an individual tends to seek confirmatory information for what they think is true and fail to search for disconfirmatiory evidence.

The confirmation Trap

71

When is the individual makes estimates for values based upon an initial value an typically make insufficient adjustments form that anchor when establishing a final value

Anchoring

72

When is the individual exhibit a bias towards overestimation the probability of conjunctive event and understanding the probability of disjunctive events

Conjunctive and disjunctive event bias

73

After finding out whether or not an event occurred individuals tend to overestimate the degree to which they would have predicted the correct outcome

Hindsight and the curs of Knowledge

74

When an individuals tend to be overconfident of the correctness of their judgments, especially when answering difficult questions.

Overconfidence

75

What is the the sequence of three numbers below follows a rule and that your task is to diagnose the rule creating the number 2,4,6

*Find the difference from right and wrong.

Confirmation Trap

76

What is a mental shortcut that allows people to make decisions and solve problems quickly and efficiently, in which current emotion, fear, pleasure, surprise, influences decision

Affect Heuristic

77

What is causes the tendency to be too sure our judgement and decisions are correct leads to overly narrow confidence intervals.

Over precision

78

What is a desire to relieve internal dissonance, outward expression of confidence help others feel sure about us, we search in our memory for confident we are correct.

Over precision

79

What is:

*We error but are rarely in doubt

*Relevance to take advice

*Suspicious of those whose view differ from our own

*Too Quick to Act

*to slow to update erroneous beliefs

Consequence of over precision

80

What describes the common human tendency to rely too heavily on the first piece of information offered when making decisions

Anchoring Bais

81

What type of anchor could bring the ultimate salary offer up.

High Anchoring

82

What is the tendency to think you are better across a number of domination then you actually are.

Overestimation

83

What are people that are motivated to see themselves positively vs. accurately

Self-enhancement

84

What are people thinking when they have more control over circumstance than they actually do

Illusion of Control

85

What is the common tendency to overestimate the speed at which we will complete projects and tasks.

The planning fallacy

86

The overestimate the rosiness of our future

Optimistic biases

87

What is the tendency to believe that we are better than others in specific ways when we're actually do.

Overplacement

88

We tend to ______________ on easy task and _______________ on hard task

over placement
under placement

89

What is:
*classes whose instance are more easily retrievable will seem larger.

* ex. judging if a list of names had more men or woman depends on the relative frequency of famous names

*based upon memory structures

Retreivability Bias

90

What is a biases that causes people to believe that they are less at risk of experiencing a negative event compared to others

Optimistic Biases

91

These are four factors that cause what biases

1. Their desired and state
2. Their congestive mechanisms
3. The information they have about themselves vs others
4. overall mood


Optimistic biases

92

These are consequences that result from what

*positive events often lead to feelings of well being
*self-esteem, while negative events lead to consequences involving more risk.
* such as engaging in risk behaviors and not taking precautionary measure for safety

Optimistic Biases

93

What is the inclination to see events that have already occurred as being more predictable than they were before they took place

Hindsight Bias

94

What is a tendency to change a recollection from an original thought to something different because of newly provided information, and reduces our ability to learn from the past and evaluate decision objectively

Hindsight

95

What is a cognitive bias according to which better-information people find it extremely difficult to think about problems from the perspective of lesser-infrared people

Curse of Knowledge

96

What is it that has been suggested that the cures of knowledge could contribute to the difficulty of teaching

Curse of knowledge

97

What is it when people have prevents them from noticing or focusing on useful, observable and relevant data

Bound Awareness

98

What is a failure to see, seek, use , share information

Bound Awareness

99

What is ti when people have a tendency not to see what they are not looking, for even when they are looking directly at something

In attentional Blindness

100

What is a psychological phenomenon that occurs when a change in a visual stimulus goes unnoticed by the observer.

Change blindness

101

What is the tendency to focus too much on a particular event and too little on other events that are likely to occur concurrently people tend to overestimate both the degree to which their future thought will be occupied by the focal event and the duration of their emotional response to the event

Foclism

102

What is the tendency of people to make judgments based on their attention to only a subset of available information, too overweight that information, and the underweight unattended information

Focusing illusion

103

What is it when groups tend to discuss more shared than unshared information

Bounded Awareness in Groups

104

What is a group that created to share information , yet they end up spending their time discussing already shared information

Paradox

105

What is recognition of information silos and mechanisms for sharing expertise

Solutions

106

What is the behavioral economic theory that describes the way people chose between probabilistic alternatives that involve risk

Prospect Theory

107

When people that make decisions based on the potential value of losses and gains rather then final outcome, and threat people evaluate these looses and gains using certain heuristics.

prospect Theory

108

What is:
* the value function replaces the utility curve
*Risk aversion is implied in the domain of gains
*Risk seeking implied in the domain of losses

Prospect theory

109

What is the way in which a consequence is present

Framing

110

What proposes that decision makers actively frame or construct the decision problem.

Prospect theory

111

What is the type of risk that occurs when a financial model used to measure a firm's market risks or value transaction dose not perform the task or capture the risk it was designed to

Modeling Risk

112

What is it when considered a subset of operational risk, as model risky mostly affects the firm that creates and uses the model

Modeling risk

113

What is the degree to which results from a specific sample represent the actual conditions in the population from which the sampling was drawn

Sampling uncertainty

114

This is an example of what?

Monte Carlo simulation has been used to evaluate more traditional measure

Influence the consequences of any alternative

Potential impacts, narrow uncertainties down to are likely to matter most

Uncertainty in a Decision Tree

115

A publisher wants to bid for the rights to publish a celebrity’s memoir. There is high uncertainty as to how many books will sell. The publisher would be better off to:

a. Bid higher than what they think the book is worth, to avoid the winner’s curse.
b. Bid lower than what they think the book is worth, to avoid the winner’s curse.
c. Enter the bid early, in order to reduce uncertainty.
d. Enter the bid late, in order to reduce uncertainty.

B

116

What is that one side often has much better information than the other side, the party with the better information is usually the seller.

Winner's Curse

117

The most critical barrier to a creative decision is:

a. System 2 thinking.
b. The failure to recognize subtle changes in the situation.
c. The failure to assign appropriate weight to information that is not readily available.
d. A narrow definition of the problem space.

A

118

In creative problem solving, composing a group of people, each with unique knowledge and perspective, is usually enough to avoid the problems of bounded awareness.

a. True
b. False

False

119

The overall goal is to recognize the tendency of groups to have bounded awareness of unshared information and create structures to overcome this tendency

Bounded Awareness

120

Groups have a tendency to focus on _________ information, at the expense of _____________ information.

a. unique, shared
b. shared, unique
c. general, specific
d. specific, general

B

121

What has a consistent tendency to focus more on shared information (information the group already has than on unique or unshared information known by only one group member

Groups have tendency

122

What explanation does the book provide for the fact that people are loss-averse, but still accept the sure loss of paying insurance?

a. The vividness of the possibility of losing a big amount of money if they are uninsured leads people to overestimate their risk.
b. The special value pseudocertainty has.
c. Social norms that favor having insurance.
d. All of the above.

D

123

14. Which is true regarding the omission bias:

a. Pharmaceutical firms are not held liable for harms caused by commission.
b. Actions resulting in failure generate more regret over time.
c. Harms of commission are easier to ignore.
d. Implementing an opt-out organ donation program can save more lives than are saved today by organ donations.

B

124

What is the tendency to judge harmful actions as wore, or less moral than equally harmful in action due to the fact that actions are more obvious that interaction

A

125

What is the implies that losses hurt more than gains. Resent estimates suggest that a loss hurts about 2X as much as gain

Loss Aversion

126

Since losses loom larger than gains, a big loss upsets us more than two smaller losses of the same total amount.

a. True
b. False

A

127

What is it when people react differently to a particular choice depending on whether it is presented as a gain and loss.

Framing

128

When a positive frame is presented but seek risks when a frame is presented.

Avoid Risk

129

According to prospect theory, in choices that involve uncertainty, our judgments are affected not only by the framing of the choice in terms of the level risk, but also by the framing of the choice in terms of gains or losses.

a. True
b. False

A

130

Which of the following is consistent with the “endowment effect?”

a. Buyers of homes usually think they are worth more than the sellers
b. Sellers of homes usually think they are worth more than buyers
c. Most homes sell because buyers and sellers value them at the same price
d. None of the above

b

131

What is the hypothesis that people ascribe more value to things merely because they won them

Endowment Effect

132

What is this an example of why so many home sellers set an inappropriately high value on their homes and find themselves without any bidders.

Endowment Effect

133

What refers to the tendency for people to strongly prefer avoiding losses than acquiring gains.

Loss aversion

134

What implies that losses hurt more than gains. Recent estimates suggest that a loss hurts about 2 times as much as a gain

Loss Aversion

135

What holds that the psychological impact of a marginal change will decrease moving further away from a reference point.

Diminishing sensitivity to losses

136

Inner city crime in the U.S. gets considerable media coverage, such that every homicide is reported in the news. In contrast, a story of a person who died from a heart attack rarely makes the news. This leads people to overestimate the frequency of deaths due to homicides relative to those due to heart failure.

a) The representativeness heuristic.
b) The availability heuristic.
c) Positive hypothesis testing.
d) The affect heuristic.

b

137

What is it when people tend to look for traits the individual may have that correspond with previously formed stereotype

Representativeness heuristic

138

What is the people accesses the frequency, probability, or likely causes of an went by the degree to which instances or occurrences of that event are already available in memory

The Availability heuristic

139

What is it when you can trigger the hindsight bias which we too quickly dismiss in retrospect the possibility differently.

Positive hypothesis testing

140

What is to be used when people are busy or under time constraints.

The affect Heuristic

141

John is over seven feet tall. When asked whether John is a professional basketball player or a software programmer, many people predict the former, even though there are many more software programmers, even very tall ones, than professional basketball players.

a) The representativeness heuristic.
b) The availability heuristic.
c) Positive hypothesis testing.
d) The affect heuristic.

A

142

Which of the following can serve as a cognitive explanation for misconceptions of chance?

a. People expect probabilities to even out.
b. People remember unusual sequences better than ones that appear more random.
c. People judge probabilities of future events as contingent on past events.
d. All of the above.

D

143

In order to avoid falling prey to ease of recall bias, a manager must discount the number of successful and unsuccessful actions taken by employees situated closer to the manager, relative to those of employees who are farther away.

a. True
b. False

A

144

What is vivid instances of an employee's behavior(either positive or negative) will be most easily recalled form memory.

*Therefore be weighted more heavily in performance appraisal

*Weight employee's performance immediately prior to the evaluation than to the previous nine months.

Recall bias

145

How can the ease of recall bias explain the high rate of restaurant openings, despite the known fact that about 80% of new restaurants close within one year?

a. It is easy to remember a good meal, good meals make us happy, and entrepreneurs believe they can make people happy.
b. Success stories are more vivid in our memory, thus are more easily recalled. This causes entrepreneurs to believe the likelihood of success of their ventures is higher than it actually is.
c. It has to do with the “it can’t happen to me” bias.
d. None of the above

B

146

What is it when an individual judge event that are more easily recalled from memory, based on vividness, to be more numerous than events of equal frequency whose instances are less easily recalled.

Ease of recall

147

What is the states that a relatively small first step leads to a chain of related events culminating in some effect.

Slippery slop theory

148

What is it when an individuals pay inordinate attention to the signal, and neglect diagnostically and transition probability the aspect of the system.

System neglect

149

What is a psychological phenomenon that occurs when a change in a visual stimulus goes unrolled by the observer.

Change blindness

150

What provide broader evidence in perceptual experiments that people have a tendency not to see what that are not looking for even when they are looking directly at it.

In attentional blindness

151

Which of the following biases is most related to the Slippery Slope theory?

a. System neglect
b. Reference group neglect
c. Change blindness
d. Inattentional blindness

C

152

In creative problem solving, composing a group of people, each with unique knowledge and perspective, is usually enough to avoid the problems of bounded awareness.

a) True
b) False

B

153

What explanation does the book provide for the fact that people are loss-averse, but still accept the sure loss of paying insurance?

a. The vividness of the possibility of losing a big amount of money if they are uninsured leads people to overestimate their risk.
b. The special value pseudocertainty has.
c. Social norms that favor having insurance.
d. All of the above.

D

154

A rational valuation of an asset is based on:

a. What the asset is currently worth on the market.
b. The time that had passed since purchasing the asset, including depreciation.
c. What the asset cost at the time it was purchased.
d. The transaction utility of the purchase.

C

155

What is the process of estimating what something is worth.

Valuation

156

What models determine value based on the observation of market price.

Relative Value model

157

What determine the present value

Absolute Value Model

158

What is to the quality of the deal that you receive evaluated in reference to "what the item should lost"

*Not rational"

Transactional Utility

159

A firm has exceeded its revenue forecast for the year, and wishes to share some of the surplus with its employees. Which of the following schemes is likely to generate higher levels of satisfaction from the employees?

a. Giving bi-monthly bonuses, with the each bonus slightly smaller than the previous one.
b. Giving bi-monthly bonuses, with each bonus slightly larger than the previous one.
c. Giving bi-monthly bonuses of equal amounts.
d. Giving one big bonus at the beginning of the year.

D

160

Since losses loom larger than gains, a big loss upsets us more than two smaller losses of the same total amount.

a. True
b. False

A

161

Since losses loom larger than gains, a big loss upsets us more than two smaller losses of the same total amount.

a. True
b. False

A

162

In negotiations, the endowment effect creates a bias primarily in seller’s evaluations.

a) True
b) False

A

163

What is it that people tend to overvalue what they own.

Endowment effect

164

According to the “multiple-selves” theory, if an online DVD rental service could offer same-day deliveries, so that people who order a movie receive it the same day, what change is likely to happen to the rental profile?

a. More documentaries and art films will be rented and fewer comedies and action movies.
b. More comedies and action movies will be rented and fewer documentaries and art films.
c. More documentaries and art films will be rented, but fewer will actually be watched.
d. More comedies and action movies will be rented, but fewer will actually be watched.

C

165

Cognitive neuroscience research has refuted the “multiple-selves” theory, finding that both short-term and long-term gratifications activate the same regions in the brain.

a) True
b) False

B

166

What has different brain areas are activated when consider either immediate rewards we want or larger delayed reward we should choose.

Multiple-selves

167

What is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity

Time Value of Money

168

What is the current value of a future amount of money a series of payment, evaluated at a given interest rate.

Present Value

169

Relative to the present time period, people tend to view all gains and losses in the future to be worth less than they would be in the present.

a) True
b) False

A

170

The extent to which people can maintain positive illusions about themselves is not limited by how unrealistic these beliefs are.

a) True
b) False

A

171

What are unrealistically favorable attitude that people have towards themselves or to people that are close to them.

Positive illusions

172

When people regard themselves more positively than they regard others and less negatively than other and less negatively than other and less negatively.

Above average effect

173

What is an exaggerated assessment of the individual's personal control over environment circumstances such as the roll of the dice or flip of coin

Illusion of control

174

What is a tendency for people to overestimate their likelihood of experiencing a wide variety of pleasant events.

Optimism bias

175

What is framing means that the way a person subjectively frames a transaction in their main will determine the utility they receive or expect.

Mental accounting

176

What shows that people have a variety of mental accounts that they use to organize evaluate, and keep track of variety of financial activities

Mental Accounting

177

What is the typical decision maker evaluates outcomes relative to a neutral point.

Reference Point

178

In Prospect theory and the value function what has a concave value function is implied in the domain of gains

Risk aversion

179

In Prospect theory and the value function what has a convex value function is implied in the domain of losses.

Risk seeking

180

What represents the impact of the relevant probability on the valuation of the prospect.

Weighting Function

181

In Prospect theory and the value function what is a sure thing is over weighted in comparison with events of moderate or high probability.

Pseudo-Certainty

182

In Prospect theory and the value function at the low end of the scale, there is a sharp drop off between an event

Discontinuity

183

What is it when Stimuli for which an animal including humans will work.

Rewards

184

What is it when Stimuli that an animal will work to escape or avoid.

Punishes

185

What can be defined as states elicited by rewards and punishments.

Emotions

186

What is the proposes a mechanism by which emotional process can guide behavior, particularly decision making.

Somatic Marker Hypothesis

187

What is the hypothesis suggests that emotions can serve as stimuli that activate a physiological response in the brain that creates a somatic state that directs our decision of how to act.

Risk-as-Feelings

188

What is it when highlights the role of affect experienced at the moment of decision making

Risk-as-feeling

189

What are emotions that are expected to b e experienced in the future.

Anticipated emotions

190

What are the immediate visceral reactions to the risks and uncertainties inherent in the decision under consideration.

Anticipatory emotions

191

What states that when you are with your friends, you are one type of person, and when you're around your parents, you're a different type of person

Multiple selves theory

192

What is is a subjective, conscious experience characterized primarily by psychophysiological expressions, biological reactions, and mental states.

Emotions

193

What is is often associated and considered reciprocally influential with mood, temperament, personality, disposition, and motivation

Emotions