PSY2002 SEMESTER 2 - WEEK 8

Question 1

define rationality as optimisation

Answer 1

calculate costs and benefits, with rationale decision maximising benefit
norms are important aspects

Question 2

define using norm to follow when making a rational decisions

Answer 2

rules of action/thoughts defining optimality

Question 3

name 2 rationality norms

Answer 3

coherence, correspondence

Question 4

define coherence norm (norm of rationality)

Answer 4

should be consistent

Question 5

define correspondence norm (norm of rationality)

Answer 5

correspond to a reality

Question 6

define availability bias

Answer 6

over-estimating frequency of rare/memorable event

Question 7

define framing bias

Answer 7

switching your decision based on question framings

Question 8

what error does availability bias correspond with

Answer 8

correspondence error

Question 9

what error does framing bias correspond with

Answer 9

coherence error

Question 10

define correspondence error

Answer 10

doesn’t reflect reality of actual crashes frequencies

Question 11

define coherence error

Answer 11

lacking coherence due to changing decision based on framing of questions

Question 12

outline the Linda problem

Answer 12

Linda is a bank teller, or Linda is a bank teller and active in feminist movement

option 2 less likely than 1, as is subset of option 1 - needs 2 things to be true, opt 1 only need 1
most people choose 2, in defiance of norms (law of probability), making conjunction fallacy

Question 13

whats conjunction fallacy

Answer 13

error in reasoning by assuming that specific conditions are more probable than a single, more general condition

Question 14

what does decision calculus include

Answer 14

using logical, systematic consideration, probability for all options

Question 15

for rationality, when probability is based on value, whats a good bet

Answer 15

expected value is greater than amount invested

Question 16

for rationality, when probability is based on value, whats a bad bet

Answer 16

expected value is less than amount invested

Question 17

in rationality, what is rational choice when investing in bet

Answer 17

• to invest to maximise expected value
• risk aversion= tendency of people to accept a sure outcome over riskier outcome
• but values not always most important factor in decision making

Question 18

when calculating expected value, what needs to be taken into consideration?

Answer 18

• various possible future situations relevant to our bets
• value of investment in those situation
• probabilities that these situations occurs

Question 19

what is expected value

Answer 19

weighted average for values in diff situ, is weighted by probabilities in each situ

Question 20

how can expected value be calculated

Answer 20

EV= P(O1) x V(O1) + P(O2) x V(O2)…..

EV= probability of it happening x value of investment if it happen

O is future outcomes that could possibly be

Question 21

give an example for calculating expected values

Answer 21

both of you toss a coin - heads you win both, tails she win both

2 outcomes = O1 heads, O2 tails

probability of each = 1/2

value of investment in each situ = when heads, is £2 and when tails, is £0

EV = P(heads) x V(heads) + P(tails) x V(tails) = 1/2 x £2 + 1/2 x £0 = £1

so EV £1, investing £1 with expectation of £1 back

Question 22

define utility

Answer 22

benefit that you are getting (rather than just thinking about its costs)
taking into consideration not just value but significance of outcomes, and degree to which contributing to wellbeings

Question 23

define expected utility

Answer 23

weighted average of satisfaction from possible outcomes

Question 24

compare decision making method and rational decision making in utility

Answer 24

calculating option with highest expected utility is decision making method, rational decision making may assume choose option that maximises our utility

Question 25

define marginal utility

Answer 25

additional satisfaction gained by unit of goods/services as amount of money has increase, each addition to one fortune become less important from subjectiv POV eg; £1000 to Bill Gates means little, but to me means lots

Question 26

explain how value isnt utility

Answer 26

utility is compressed with respect to value = ie dont enjoy 10 pizza 10x more than 1, even though it cost 10x more than just 1 - utility is how much you enjoy/prefer it, degree to which it contributes to your overall wellbeing/satisfies your desires

Question 27

according to expected utility theory, how should we behave when flips coins

Answer 27

should behave to maximise expected utility ie, if option a is head to win £1000, but tails £0 or b no coin flip = £499, then choose A

Question 28

whats equation for calculating expected utility?

Answer 28

E=p*U expected utility =probability x utility

Question 29

give example of calculating expected utility for bet, 50% chance of a £40 payoff?

Answer 29

E=0.5 x 40 = £20

Question 30

give equation for calculating expected utility under multiple option

Answer 30

E=p1*U1 + p2*U2.....

Question 31

give an example of calculating expected utility for multiple option?

Answer 31

eg; offered lottery ticket for £15 with 20% chance of paying out £50 and 10% chance of paying out £100 according to expected utility theory, should you buy? expected utility (E) need to exceed cost (0.2 x 50) + (0.1 x 100) = 20 20 is more than £15 = YES

Question 32

define 'effect of uncertainty'

Answer 32

everything has uncertainty but differ in amounts

Question 33

for graph with smooth curve of uncertainty, what does it mean??

Answer 33

things will most likely be okay but they could go very good or bad

Question 34

for graph with small bump, then a big bump, mean with uncertainty

Answer 34

things will probably be good but there's a small chance they might go bad

Question 35

for graph with big bump, then another a big bump, mean with uncertainty

Answer 35

things could be good or bad

Question 36

define loss aversion

Answer 36

if garunteed loss, opt for option where loss may/not happen instead of optimal utility = aversive to garunteed loss if have £100, lose £50, likely feel worse than if had £0 and gained £50 innate motive to prefer avoiding losses rather than achieving similar gains

Question 37

how does loss aversion align with biases in making decision

Answer 37

feel pain of loss more than pleasure of equivalent gain

Question 38

define risk aversion

Answer 38

tendency accept sure thing over risk, despite lower expected values

Question 39

if have $1000, choose to either a. flip, heads win another $1000, tails win nothing b. an additional $500 if have $2000, choose to either a. flip, heads lose $1000, tails lose nothing b. lose $500 what would utility theory suggests do

Answer 39

choose b for both= coin flip between £1000 and £2000 and b is £1500 for certain

Question 40

define prospect theory

Answer 40

alternative to utility theory, accounting for regularities in humans economic behaviour ie, willing overpaying for a small chance at large gain like for lottery ticket, willingness to pay premium to eliminate small risk (insurance), willingness to take on risk to avoid large loss, etc

Question 41

outlines why rationality 'bounded'

Answer 41

complex environment so decisions need making quick, time limited, cog capacity also is limited

Question 42

what does ecological rationality perspective suggest regarding why we would use heuristic

Answer 42

rationality are defined by how should behave in environment to survive, not just norms correspondence with environment (how cog work in world) more important than coherence (logic processing) past behaviours may fail when environment rapid changes

Question 43

define adaptive value

Answer 43

value of action, across evolutionary time, with evolution maximising long-term expected value error permissible if average benefit, avoids costly mistake, avoid high cost

Question 44

why are heuristics good?

Answer 44

heuristics give us strategy in uncertain world, make assumptions and allow decision when unable to use systematic strategy don’t attempt to find optimal solution but good enough solution, but can have biases

Question 45

when does a recognition heuristics work

Answer 45

works when have some (not none) knowledge and when likelihood of hearing of option correlate with its value/importance/size

Question 46

when does a recognition heuristics not work

Answer 46

when doesn’t work (knows too much, little, when incidence isn’t related to value) can lead to systematic error

Question 47

why should an good heuristic be frugal

Answer 47

ignores info, don’t trying optomise but satisfice (finding good enough solution) eg; choosing max of function is form of optomising but choosing first option that exceeds aspiration level is satisficing

Question 48

what is computational heuristic model

Answer 48

make precise predictions and can be tested experiment via computer, promoting theoretical progress use tractability and robustness

Question 49

what is tractability (computational heuristic model)

Answer 49

many real world problem computationally intractable - computer cannot find best strategies

Question 50

what is robustness (computational heuristic model)

Answer 50

we use hindsight to analyse our past with relev info from past experiences divided in 2 group (relev for future, + irrelevant noise) if criter more diff predict = more nosie

Question 51

define default heuristic

Answer 51

if there is default do nothing about it = why more French organ donor>Americans

Question 52

how can you study heuristic

Answer 52

- analyse on phylogenetic, ontogenetic and cultural dev level - determine environ structures that heuristics successful at

Question 53

how does reinforcement learning impact how heuristics selected

Answer 53

heuristic is selected based on individual reinforcement learnings, guided by individual reinforcement learning, social learning (being told where to look up info as doctor), evolutionary learning (rules of thumb on predation)

Question 54

what 2 judgements used to check ecolog rationality of heuristic before is applied regular

Answer 54

1. recognition judgement: determine whether heuristic can be used in situ 2. evaluations

Question 55

what 3 laws/theory define bias/error

Answer 55

- expected utility theory - laws of logic - laws of probability (eg, conjunction problem)

Question 56

summarise 2-4-6 tasks (Wason)

Answer 56

find generating rule using to create 3 number sequence, propose test examples and get told whether fits/break rules found most people mostly think highly specific rule, generate examples to fit= use confirmation bias

Question 57

define positive test strategy

Answer 57

seek to verify hypothesis, but then can find it false

Question 58

define negative test strategy

Answer 58

seek to falsify hypothesis, but can find it true

Question 59

outline process of positive test strategy, when rule is general

Answer 59

belief- rule is specific truth- rule is general positive test strategy- always confirms belief, belief never improves

Question 60

outline process of positive test strategy, when rule is specific

Answer 60

belief- rule is specific truth- rule is specific positive test strategy- rapidly converges on truth

Question 61

apply positive and neg test strategy to knocks at door

Answer 61

hear knock at door hypothesis: someones at door - positive test strategy: open door - negative test strategy: eliminate other possible sources of knocking (check window and wardrobe, etc) fir between hypothesis and reality determines which is best

Question 62

define communication interpretation

Answer 62

when info is given, tend to be for reason so use that info to come to answer

Question 63

compare bias/error

Answer 63

- mistake one off, but systematic errors consistent - biases are making wrong choice but for reason

Question 64

name 3 reason for making systematic error

Answer 64

- using strategy optimised for diff environ - considering diff bundle of choice - using different cost/benefit analysis

Question 65

state dual process theory predictions for rational v heuristic thinking

Answer 65

features should go together= no conscious heuristic thinking or rational thinking should switch between modes of thinking in right circumstances (eg, more time = more deliberate thinking)

Question 66

what are dual process theories

Answer 66

psychological theory which posits 2 processes which work at same time, or support same capacity usually work together, can be in conflict with eachother, one usually has system 1-like properties, one system-2 like properties (ie, 1 like heuristics, 1 like a rational)

Question 67

name implications for investigating diff biases

Answer 67

we try understand - their perception of costs & benefits - their experience of similar decisions - their assumptions about environment

Question 68

what 2 systems does dual process theory state we have?

Answer 68

fast system 1 slow system 2