PSYC-355 Lecture Notes - Lecture 11: Prospect Theory, Representativeness Heuristic, Weighted Arithmetic Mean
19 Nov 2018
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Decisions are a function of probability assessment and expected value of outcome. Prospect theory: how we value gains and losses (arrive at expected value) What are heuristics: mental shortcut used in judgment and decision making. Why or why not: yes they are, because it is a shortcut" to making a decision. Without it we would have to much information to decide from. We are often happy with what is good enough. Why or why not: they often work well but there are many cons to it such as representative & availability heuristics. Why do researchers study errors caused by heuristics: they study errors to tell us how heuristics function and shows us when not to use it to make better more accurate decisions in the future. What is the representativeness heuristic: tendency to categorize instances based on how similar they are to a category.
