Ch 13; Reasoning And Decision Making Pt. 2

Front 1

Expected Utility thoery

Back 1

The assumption that people are basically rationale, so if they have all of the relevant information they will make a decision that in the maximum expected utility.

Front 2

Do people always make decisions that yield the maximum expected utility? WHY?

Back 2

No because they often ignore the optimum way of responding based on probabilities.

Front 3

What are some examples of situations in which people do not behave to maximize the outcome, as the utility theory suggest?

Back 3

- An experiment that involved participants trying to decide which bowl to pull from to earn the most money revealed that even when participants know the probability of choosing a red bean from two bowls of white beans they often choose the less probable bowl option, maybe because it has more red beans altogether?
- Also seen in the game deal or no deal people often choose an option that is more risky and often leaves them with less money than they would have had previously.

Front 4

What are reasons behind why people make bad decisions and do not follow the more probable decision, what will yield the most?

Back 4

- We are often influenced by our emotions when we are making a decision.
Those who are down on their luck compromise by making riskier decisions in the hope that it will make them feel better in the end and pay off.
Those who have been doing well all along and are happy have something to loose and do not want to jeopardize their good mood therefore they make less riskier decisions (make deal earlier instead of loosing more money).

Front 5

What is not considered by the utility theory?

Back 5

Emotions of an individual as they are making a decision.

Front 6

Expected Emotions

Back 6

Emotions that people predict they will feel for a specific outcome.

Front 7

What are the two forms of immediate emotions?

Back 7

Integral and incidental

Front 8

Intergal immediate emotions

Back 8

Emotions that are experienced whilst making a decision that are associated with the act of making the decision.

Front 9

Incidental immediate emotions

Back 9

Emotions that are experienced while making a decision that are unrelated with the decision. These are usually caused by a persons general disposition or something that happened earlier in that day.

Front 10

Risk aversion

Back 10

The tendency to avoid risky behaviour

Front 11

What is the connection between risk aversion and people's ability to predict their on emotions?

Back 11

When people are better able to predict their emotions, their expected emotions influence their decision making process. This in turn influences how risky people are willing to be. If they believe they believe a loss will greatly upset them they are less likely to be risky and if not they might show more risk.

Front 12

Describe the Kermer experiment in which participants rated their expected happiness before gambling and their actual happiness after gambling?

Back 12

Kermer's experiment was on perceived happiness. It demonstrates that the actual effect of losing was substantially less than what most people predicted therefore showing that people often overestimate what their negative feeling will be.

Front 13

What is a reason why people overestimate what their negative feelings will be?

Back 13

People do not take into account the various coping mechanisms that often take place on a psychological level to deal with the adverse events.

Front 14

What is some evidence that incidental emotions effect behaviour?

Back 14

An experiment was completed by Lerner and coworkers to identify how economic decisions can be influenced by peoples emotions. They found that emotions indeed effect the economic decisions of establishing and buying processes of a product. The disgust and sadness groups were more willing to sell their items for less than the neutral group. Disgust is associated with a need to expel things and sadness with a need for change therefore both moods were more conducive to people being willing to let go of their product faster.

Front 15

How do the way choices are presented effect the decisions people make?

Back 15

An example of how wording a problem can influence a decision is demonstrated by slovic's design of a question asking who would discharge a potentially dangerous individual. When the question was presented after a more abstract description of previous cases and statistics individuals were 20% more likely to allow the patient to be discharged. Reason behind this is that maybe the abstract probability statement could be interpreted more as only a small percent chance that patients like the one described would be violent.

Front 16

What does imaging techniques on activity in the Prefrontal cortex show?

Back 16

That it is activated by stimuli from all of the senses, by the retrieval of memories, and by the anticipation of future events, and can be affected by a persons emotional state. Therefore there is no surprise it plays a large role in thinking and reasoning.

Front 17

What does Penfield's case study on a young house-maker with a tumor in her frontal lobe demonstrate?

Back 17

Damage to this area can cause an inability to carry out plans even though someone may be capable of the physical procedures involved thus demonstrating that the prefrontal cortex plays and important role in planning future activities.

Front 18

What do patients with damaged Prefrontal cortex show about problem solving and reasoning?

Back 18

- An increase in preservation, where patients have difficulty switching from task to task. This indicates that the PFC interferes with people's ability to act with flexibility therefore impeding problem solving.
- A difference was shown between temporal damage patients, prefrontal damage patients and healthy brain patients in a deductive reasoning task involving unscrambling the height order of individuals after being given an abstract descriptive of them. It showed that those specifically with prefrontal cortex damage found this task significantly difficult whereas those with temporal damage and healthy individuals did not. This illustrates a direct relationship between the PFC and problem solving and reasoning.

Front 19

What is Neuro-economics?

Back 19

It is a research form that combines the fields of psychology , neuroscience and economics together.

Front 20

Describe Sanfey's (2003) experiment, and

Back 20

Sanfey's experiment the ultimatum game involves to players a proposer and a responder. The participant the responder is meant to answer yes or no to whether or not they will expect the proposer's offer of how they are willing to split a sum of money (10$). If the responder says yes then the money is split in the way suggested, if the responder says no then neither gets any money.
The participants play 10 trials with a person as the proposer and 10 trials with a computer as the proposer.
The utility theory would suggest that we will always say yes therefore we always will get something which is better than nothing, however this does not always occur.
When participants played against a proposer that was human they said no more times when an offer was unequal than when they played with a computer.

Front 21

Indicate what Sanfey's (2003) experiment adds to our understanding of decision making?

Back 21

This indicates that we are less likely to feel cheated by a computer or get angry with it, probably b/c we know it lacks empathy as apposed to when we are are playing against another human being.
- This tells us that when it comes to decision making it matters with whom we are dealing with as well as if we feel like we are being treated fairly or unfairly (more angry). This s indicated by an increased in activity in the right anterior insula when rejection of an offer occurs; an area associated with negative emotions.

Front 22

The omission bias

Back 22

The tendency to do nothing to avoid having to make a decision that could be interpreted as causing harm

Front 23

How are people's decisions about treatment options influenced by the person or group for whom they are making the decision for? Provide and example in research.

Back 23

An experiment by Zikumun-Fisker indicates that the decisions people make can be influenced by the person or group for whom they are making the decision for. There dat showed that when it came to health treatments they are more likely to select the more logical choice when the decision is being made regarding someone else's well being that their own.
-ZF suggest that when making decisions for other's people take into account the possibility that they will be held responsible if something bad happens. The numbers of selecting the health treatment were smaller when it involved the self. Less responsibility if something went wrong.