PSY30400 Chapter Notes - Chapter 13: Neuroeconomics, Risk Aversion, Organ Donation

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15 May 2018
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Chapter 13: Judgement, Decisions, and Reasoning
Decisions can depend on how choices are presented:
o People’s judgets are affeted y the way hoies are stated
o Think about the example of people saying they would be an organ donor but
very few actually taking action and going through the opt-in procedure
Different from an opt-out procedure
o Status Quo Bias:
tendency to do nothing when faced with making a decision
think about the example of default offerings of cheaper or more
expensive driving insurance plans
o Way a choice is presented is important when a person is forced to pick one
alternative or another
think about experiment that frames the disease problem in two different
ways
Risk Aversion Strategy:
idea of saving 200 lives with certainty is more attractive than the
2/3 probability that no one will be saved
Risk Taking Strategy:
certain death of 400 people is less acceptable than taking a 2 in 3
risk that 600 people will die
This problem illustrates framing effects
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