PSY 306 Lecture Notes - Lecture 4: Expected Utility Hypothesis, Risk-Seeking, Daniel Kahneman
10 Aug 2019
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Basic biases in our everyday judgement and decision-making. If we don"t know about these biases, it is hard to correct them. Slope on negative side (left) is steeper than the slope on the positive side (right) Going 1 unit left moves you further down that moving 1 unit right moves you up. Losses have bigger psychological impact than gains. Slope is steeper closer to zero than further away in either direction. Going from 0 to -1 is worse than -1 to -2. Stalin: 1 death is a tragedy, 100 is a statistic. Alternative a: a sure gain of . Alternative b: a 50% chance to gain and a 50% chance of gaining sh. Alternative a: a sure loss of . Alternative b: 50% chance to lose or a 50% of losing 0. Prefer sure gains and a risk to lose nothing. Risk averse for gains; rick seeking in loss situations.
