CGSC 1001 Lecture Notes - Lecture 11: Time Preference, Omission Bias, Risk Compensation

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CGSC 1001
Feb 23
Biases
-ways that make us irrational
-heuristic is also used instead of bias.
-bias could have helped us survive in the past.
Anchoring
-manipulation of how we evaluate things
-ex: when looking at the menu of restaurant you will define what is expensive and what is cheap by
comparing it to others on same menu. Restaurant could add very expensive dish in order to make others
cheaper.
Bandwagon effect
-tendency to believe the same thing as others around us because disagreement in social group creates
tension.
Confirmation bias
-only notice evidence that support your beliefs.
Contrast effect
-we aren’t good at putting objective value on thing. We value things based on what’s around it or our
use for it later.
Endowment effect
-this could explain hoarding
Hostile media effect
-notice more frequently when media espouses views against yours
Temporal discounting
-many people who live in dire conditions often suffer from temporal discounting because the future
looks so uncertain
-not necessarily irrational to have discounting, but past a certain level it is.
-people underestimate how long things will take and assume they will have lots of time in future.
Moral credential effect
-we have some opinion about how good we are
-if we think we are good, we stop looking for good things to do
-moral licensing: the odds of you doing good things in future decrease if you think you are morally good
right now.
-ex: having something healthy with your meal licenses you to have more calories.
Risk compensation
-wearing a helmet licenses someone to behave more dangerously
Negativity bias
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