Exam 10: Judgment, Decision Making and Problem Solving

According to the textbook, intuition is a faulty decision-making tool and, thus, it should be avoided.

A cognitive bias that involves overestimating one's strengths and underestimating one's weaknesses is:

Todd's horoscope predicted that he would soon travel to a faraway land. That night, while playing the board game Risk, he ended up capturing territory on the Asian continent, a faraway land. He smiles knowingly. Todd's example illustrates:

Assigning someone the role of devil's advocate is an ineffective way to prevent groupthink because it leads to hostility at best and anchoring effects at worst.

Think of a "dumb" decision that you made in the past. Based on what you've learned in this chapter, explain the type(s) of error(s) you made in problem solving or decision making. Explain what you would do differently in a similar situation in the future.

Fifi and Mimi are playing a coin-flipping game. Whenever the coin lands on heads, Fifi wins $1. If tails are flipped, Mimi wins $1. For the first 20 flips, the coin has landed on heads. "Time to switch," Fifi says, believing that tails are due to win. "You have heads, and I'll take tails." After switching, the coin, once again, lands on heads. In this example, Fifi has fallen victim to _____________.

Compare and contrast two of the biases/heuristics discussed in the text. Provide examples of times that you succumbed to such biases/heuristics.

Consider the following description: Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which inference about Linda would a person who committed a conjunction fallacy be most likely to draw?

Which of the following occurs as a result of people's aversion to losses?

Some time ago, Martha invested half of everything she owns into starting a new hamster-sitting business. After one year, however, the company is losing big time! That said, Martha decides that she has invested too much to quit now. She sells her car, and then her house in a desperate attempt to save her company. As a result, all evidence suggests that Martha has fallen victim to ____________.

Which of the following is not a characteristic of groups that are prone to groupthink:

Social loafing refers to people's tendency to use the opinions of people they admire as a shortcut when making difficult decisions.

While walking down the street, Buford is approached by a stranger, who makes the following offer: "Let's flip a coin. If it's heads, I'll give you $1,000. If it's tails, you give me your wristwatch." Buford figures that his wristwatch is only worth $600, but it was a gift from his grandmother that he cherishes, so he decides not to accept the stranger's offer. Buford's decision can be best characterized as based on:

One disadvantage of using expected utility as a tool for making decisions is that it can only be applied in situations involving monetary values.