#1
Which of the following is a factor that can influence decision making?
Emotions
ExplanationEmotions can sway decision-making processes by impacting perceptions and priorities.
#2
What does the term 'bounded rationality' refer to in decision making?
The idea that people's rationality is limited by constraints such as cognitive abilities and time
ExplanationBounded rationality acknowledges human limitations in processing information and making optimal decisions.
#3
In decision theory, what does 'satisficing' mean?
Choosing an option that meets minimum requirements rather than the optimal solution
ExplanationSatisficing involves settling for a satisfactory choice instead of exhaustively seeking the best one.
#4
What is 'anchoring bias' in the context of decision making?
The tendency to rely heavily on the first piece of information encountered when making decisions
ExplanationAnchoring bias skews decision-making processes by overly weighting initial information or reference points.
#5
What is the 'availability heuristic' in decision making?
The tendency to overestimate the likelihood of events based on their availability in memory
ExplanationAvailability heuristic leads individuals to overemphasize the probability of events based on how easily they can recall instances from memory.
#6
What role does 'groupthink' play in decision making?
It can result in flawed decisions due to pressure for consensus within a group
ExplanationGroupthink hampers decision-making quality by prioritizing consensus over critical evaluation, leading to flawed outcomes.
#7
What is 'loss aversion' in decision-making psychology?
The preference for avoiding losses over acquiring equivalent gains
ExplanationLoss aversion influences decisions by causing individuals to prioritize avoiding losses, even at the expense of potential gains.
#8
Which of the following is NOT a step typically involved in the rational decision-making model?
Seeking validation from peers
ExplanationSeeking validation from peers isn't inherently part of the rational decision-making process, which typically involves analysis and evaluation of options based on personal criteria.
#9
What is 'confirmation bias' in decision making?
The tendency to seek out information that confirms one's pre-existing beliefs and ignore contrary evidence
ExplanationConfirmation bias skews decision-making by favoring information that aligns with existing beliefs, while disregarding contradictory evidence.
#10
What is 'bounded awareness' in decision making?
The tendency to overlook relevant information due to focusing too narrowly on a few key factors
ExplanationBounded awareness limits decision-making effectiveness by causing individuals to overlook pertinent information, usually by fixating on specific aspects.
#11
Which of the following is a characteristic of a 'risky shift' in group decision making?
Groups tend to make riskier decisions than individuals
ExplanationGroup decisions often lead to riskier outcomes than those made individually due to diffusion of responsibility and shared risk perception.
#12
What is 'prospect theory' and how does it differ from expected utility theory?
Prospect theory suggests that people make decisions based on potential gains and losses, whereas expected utility theory assumes decision makers are entirely rational and always choose the option with the highest expected utility.
ExplanationProspect theory diverges from expected utility theory by considering how individuals perceive potential gains and losses, accounting for behavioral biases and departures from rational decision-making.
#13
What is the 'endowment effect' and how does it influence decision making?
It is the tendency to overvalue objects or assets simply because they are owned.
ExplanationThe endowment effect leads individuals to assign greater value to items they possess, compared to identical items they don't own, influencing decision-making outcomes.