Price demo: Lindt chocolate
Judgment: would you be willing to pay ___ (UID digits)
=> yes or no
Then estimate the actual price
What were the results? Why is it irrational?
- the first question is a preference
- second one is about objective
Results:
the higher the digits, the higher the estimates, same for lower.
This is a result of the ANCHORING effect
Irrational bc these judgments are unrelated - what does our ID no. (arbitrary) have to do with the price of chocolates?
Economist demo
- what occurs when (P) Print only is added to the options?
- becomes a decoy in the decoy effect
- more ppl choose (P+O) bc it feels like (O) is free, makes (P+O) more attractive (relative attractiveness)
- influences our preferences
- decoy allows us to focus attention on the easy comparison (focus on price vs features)
Introspection
looking inward / observing our thoughts
Misperceived causality: cold (weather) causes pneumonia
- our brains pick up correlations
- tend to automatically infer causal explanations, so a natural inference would be that cold causes pneumonia
Persistence of false beliefs
- wouldn’t we notice over time that cold doesn’t cause pneumonia bc many cases where ppl are exposed to the cold
=> biases in interpreting info
Possible origins of false belief
- misinterpreting a coincidence
- misperceived causality
Irrational thinking
=> unconscious influences on judgments and decisions that can cause systematic errors
our mental processes allow us to make complex decisions with limited info, can lead to systematic errors
What did Tversky and Kahneman propose?
that we rely on heuristics (mental shortcuts - fast, shortcut) to make reasonable and fast judgments under uncertainty
