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23 Cards in this Set
- Front
- Back
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Decision
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A choice among possibilities
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When does a decision occur?
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When a person with an unfulfilled need takes an action to satisfy that need.
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Normative THeories of Decision Making
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Focus on how we SHOULD make decisions
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Descriptive Theories of Decision Making
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Focus on how we actually make decisions not on how we should!
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The Decision Tree
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Represent the course of action that we could take
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What 3 things make up a decision?
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1. Alternatives
2. Beliefs 3. Consequences |
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Alternatives
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Different courses of action, options, choices, and strategies available to the decision make
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Belief
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OUr estimate of the likelihood that a particular outcome will occur if we choose a particular alternative
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Consequences
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The benefits or losses that you recieve or experience from the choice of a certain alternative.
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Outcome
Value Utility |
1. The result
2. The net worth 3. The desirability of the value to you |
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Subject Expective Utility Model
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1. Assumes rational behaviour on the part of the decision maker.
2."what's it worth to you" 3. The utility of a certain outcome, weighed by the likelihood of that outcome occuring. |
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Limitations of SEU Model
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1. overweigh small possibilities
2. overestimate unlikely events and underestimate likely events. 3. We are not perfect calculators. |
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Framing Effects
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The influence of various ways that a problem may be put
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Prospect Theory
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The 1st stage of decision making is understanding the prospects ahead by framing the terms of the deciision.
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Framing
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Simplifying and combining some quantities and evaluating prospective gains and losses in relation to a reference point
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Reference Point
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The current situation before a decision is made
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Representative Heuristic
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Shy and tidy: librarian/teacher/lawyer
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Availability Heuristic
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More deaths: Lung cancer/motor deaths or same?
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Anchor and Adjust
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asking price effect on house price estimate
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Elimination by Aspects
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A strategy that succesively evaluates a possible choice on a number of attributes, eliminating the choices that do not measure up to criteriom.
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Algorithm
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A step by step recipe for making a decision
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Satisficing
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A method that finds not necessarily the best of all possibilities but one that is good enought to meet the desires of the decision maker.
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Somatic Markers
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Emotional signals that warn us that imporant events are about to occur.
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