Think about your class schedule for this semester. Chances are that it came toge

Question

Think about your class schedule for this semester. Chances are that it came together as a result of you engaging in decision making-the selecting of the best alternative from among several options. For instance, why are you in this psych course? Perhaps it's because you decided to major in psychology instead of in business or English or to remain undeclared in your major. Maybe this is an elective course, and you choose it over another course in economics or geology You may be taking this course because it is a distributional requirement, and perhaps you had to decide among sections offered in the morning, afternoon, and evening. In theory, the mental process for making any decision is simple: You determine the relative costs and benefits of each choice, then rationally choose the option with the most favorable outcomes. For instance, if you chose psychology for an elective course, perhaps you weighed the value of what you would learn in psychology against that of some other course, such as geology and then rationally choose psychology because you expect it will be more applicable to your life now or in the future Until the late 20th century, this highly rational process for decision making is how most psychologists and economists assumed people acted. Expected utility theory, the dominant theory of decision making, held that people simply calculate the "expected utility," or value, of the possible choices for any decision they need to make and choose the option that maximizes the desired outcome In the 1970s, psychologists Daniel Kahneman and Amos Tversky realized that they themselves made less-than-rational decisions that were not consistent with expected utility theory. They wondered why and engaged in research in which they asked people what they would do in different situations and under different contexts to evaluate whether people always rationally maximize expected value In this ZAPS lab, you will participate in a series of "mini-experiments" from Kahneman and Tversey's classic research on decision making

Explanation / Answer

1. Availability heuristic is a mental shortcut that we use to arrive at a decision based on the number of readily available examples . For the question" which of the following is true about the English language?", We are more likely to answer "there are more words that start with the letter k than have k as the third letter because words that start with the letter k become more readily available to us such as 'king, know , etc than to come up with words that have k as the third letter. This is an example of how we make decisions by availability heuristics.

2. People tend to be entirely rational when making important decisions

False.

Until the 20th century, it was thought that decisions were made according to the Expected Utility theory which states that when making a decisio, people weigh the value or utility of a decision and take the choice that has most utility. But researchers, Kahneman and Taversky realised that people in general make less than rational decisions that are based on a number of other factors.

3. The principle of FRAMING states that the way a choichoice is worder can substantially change its psychological prospects

4. Expected Utility theory was the dominant theory of decision making until the late 20th century

According to this, people always made decisions based on the value of a choice and were completely rational while making a decision.

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