PHL145H5 Chapter Notes - Chapter 18: Sunk Costs, Confirmation Bias, Status Quo Bias
Document Summary
Descriptions of certain alternatives is bad because similar descriptiions can change your outcomes. Certainty effect: preferences for certain outcomes over uncertain ones: eg/ its what politicians do when they want to get elected (solve the problem rather than offer solutions to it) When we assume that certain parts of money come from different accounts : eg/ lose ten bucks, would you still pay another 10$ to watch the movie or already paid. 10 bucks and lost the ticket would you still pay again to watch: eg/ spending on credit cards. Magic numbers: originally used to measure something else can take on a life of their own. Bright lines: boundaries for policies: good because they create boundaries that cannot be renegotiated with anyone. Problems: it promotes all or nothing thinking because you just getting over the measure of success is enough.
