Decision Making and Consequences Quiz

Expected utility represents the average value of a decision, taking into account the probabilities of different outcomes and their associated utilities.

The Bystander Effect is the phenomenon where individuals are less likely to offer help to a victim when other people are present. It relates to decision-making as it involves assessing whether to intervene in a situation based on the presence of others.

Regret aversion refers to the tendency to avoid decisions that might lead to regret, often resulting in risk-averse behavior.

Prospect theory suggests that individuals make decisions based on the potential value of losses and gains rather than the final outcome itself, and they tend to weigh potential losses more heavily than equivalent gains.

Loss aversion is the cognitive bias where individuals prefer to avoid losses rather than acquire equivalent gains, often resulting in risk-averse behavior.

A heuristic is a cognitive shortcut or simplified rule of thumb used to make decisions quickly.

Opportunity cost refers to the value of the next best alternative that must be sacrificed when a decision is made.

The Paradox of Choice suggests that having too many options can lead to indecision and dissatisfaction.

Rational decision-making involves systematically evaluating alternatives to choose the best option based on established criteria and goals.

Emotions play a significant role in decision-making, influencing choices by affecting perceptions, judgments, and risk preferences.

Confirmation bias is the tendency to search for, interpret, and remember information in a way that confirms one's preconceptions.

The sunk cost fallacy occurs when individuals continue a course of action because of previously invested resources, regardless of the future costs and benefits.

The Cobra Effect refers to unintended adverse outcomes that occur when interventions to solve a problem exacerbate the problem or create new ones.

Intuitive decision-making is based on instinct, hunches, or implicit knowledge rather than explicit analysis.

Anchoring bias occurs when individuals rely too heavily on the first piece of information encountered (the 'anchor') when making decisions or judgments.