01:830:305 Lecture Notes - Lecture 6: Allais Paradox, Strategic Dominance, Risk-Seeking
16 Jan 2018
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Participate in 5-10 min study: sometime next week. Send two-page paper describing a cognitive phenomenon discussed in class and explain using person experience example paraphrase and use example not from class. Completion will grant 3 points on exam ii. Optimal action that satisfies the decider"s values and beliefs: example expected utility theory, see cognitive decision-making course in fall, descriptive. Description of how decider arrives at decisions: example prospect theory, prescriptive theory. Using what we know about how people do act (descriptive) and turning them towards the goal of how they should act (normative: using the descriptive theory to maneuver people towards the normative theory. Can be used for good or bad. Disease threatening 600 citizens: either choose one of two programs. One third chance of saving all 600 or two thirds chance of saving no one: now choose one of these two programs.
