PSY BEH 11B Lecture Notes - Lecture 9: Bounded Rationality, Netflix, Availability Heuristic
7 Feb 2019
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Using knowledge to solve problems, make plans or decisions, & achieve goals. Utility x likelihood of occurrence = expected utility. When face with a choice, people behave rationally. For each option, the utility of that option is multiplied by the likelihood that it will occur: A person selects the option that offers the highest expected utility. Should choose door b! (according to this theory) Expected utility: . 25 x 200 = . Expected utility: . 5 x 80 = . Use all available info; think through all possible solutions to a problem; choose best one. No matter what the content, no matter whether we factor a position or oppose it, no matter how choices are presented, a rational person should be guided by the same reasoning principles. Change the way that they reason based on the context of the situation. Too many options to evaluate each option in some cases. Hard to measure what utility is in some cases.
