Question 1

The hot-cold empathy gap refers to individual's inability to understand other's feelings.

Accepted Answer

A) True 
 B)False

Question 2

Visceral factors may drive individuals to make decisions in a similar fashion to projection bias.

Accepted Answer

A) True 
 B)False

Question 3

Consider equation 11.34 and the model presented above. The interpretation of equation 11.34 is that for a given $x_{2}$, the marginal utility I receive from $x_{1}$ increases as my visceral state becomes hotter. That is, without adjusting consumption of $x_{2}$, as my visceral state becomes hotter than the marginal utility I get from an increase in $x_{1}$ increases.

Accepted Answer

A) True 
 B)False

Question 4

Hindsight bias occurs when we do not perfectly remember the information our past self had at the time of making a decision.

Accepted Answer

A) True 
 B)False

Question 5

Consider the following inter-temporal choice problem, where $s^{\prime}$ is the state today and $s$ is the state tomorrow. $\max _{c_{1}} u\left(c_{1}, s^{\prime}\right)+\delta\left[(1-\alpha) u\left(w-c_{1}, s\right)+\alpha u\left(w-c_{1}, s^{\prime}\right)\right.$. This problem reduces to the rational model of inter-temporal choice when $\alpha=1$.

Accepted Answer

A) True 
 B)False

Question 6

The hot state refers to which of the following:

Accepted Answer

A)  When individuals make decision based on the hot weather today and they fail to predict that it might be cold tomorrow. 
B)  When a visceral factor is active. 
C)  When a visceral factor is inactive. 
D)  When individuals are unable to predict future hot weather. 
A)  When individuals make decision based on the hot weather today and they fail to predict that it might be cold tomorrow. 
B)  When a visceral factor is active. 
C)  When a visceral factor is inactive. 
D)  When individuals are unable to predict future hot weather.

Question 7

Consider example 4. The authors wanted to know whether people had a tendency to buy cold-weather clothes through catalogs when the current weather in their location was cold due to a projection bias. Showing that purchases of winter gear increased during cold
Weather provide confirmatory information. What piece of information provides disconfirmatory information?

Accepted Answer

A)  Knowing whether they were less likely to enjoy the gear they bought during the cold weather. 
B)  Knowing whether they were more likely to also purchase warm weather gear during the cold weather. 
C)  Knowing whether they were more likely to purchase warm weather gear on hot days. 
D)  Knowing whether they were more likely to enjoy the cold weather gear they bought during warm weather. 
A)  Knowing whether they were less likely to enjoy the gear they bought during the cold weather. 
B)  Knowing whether they were more likely to also purchase warm weather gear during the cold weather. 
C)  Knowing whether they were more likely to purchase warm weather gear on hot days. 
D)  Knowing whether they were more likely to enjoy the cold weather gear they bought during warm weather.

Question 8

Using projection bias to describe addictive behaviors allows us to model the idea that individuals were not aware of how consumption today would affect their desire to consume tomorrow.

Accepted Answer

A) True 
 B)False

Question 9

Consider a model of inter-temporal choice, with utility function $u\left(c_{1}, c_{2}\right)$. If $c_{1}$ and $c_{2}$ are complements then which of the following must be true?

Accepted Answer

A) $\frac{\partial u\left(c_{1}, c_{2}\right)}{\partial c_{1}}>0$ B) $\frac{\partial u\left(c_{1}, c_{2}\right)}{\partial c_{2}}0$ D) $\frac{\partial^{2} u\left(c_{1}, c_{2}\right)}{\partial c_{1} \partial c_{2}}<0$ A) $\frac{\partial u\left(c_{1}, c_{2}\right)}{\partial c_{1}}>0$ B) $\frac{\partial u\left(c_{1}, c_{2}\right)}{\partial c_{2}}0$ D) $\frac{\partial^{2} u\left(c_{1}, c_{2}\right)}{\partial c_{1} \partial c_{2}}<0$

The hot-cold empathy gap refers to individual's inability to understand other's feelings.

Visceral factors may drive individuals to make decisions in a similar fashion to projection bias.

Hindsight bias occurs when we do not perfectly remember the information our past self had at the time of making a decision.

The hot state refers to which of the following:

Using projection bias to describe addictive behaviors allows us to model the idea that individuals were not aware of how consumption today would affect their desire to consume tomorrow.

Consider a model of inter-temporal choice, with utility function $u\left(c_{1}, c_{2}\right)$ . If $c_{1}$ and $c_{2}$ are complements then which of the following must be true?

Rationality, Irrationality, and Rationalization

Transaction Utility and Consumer Pricing

Mental Accounting

Status Quo Bias and Default Options

The Winners Curse and Auction Behavior

Bracketing Decisions

Representativeness and Availability

Confirmation and Overconfidence

Decision Under Risk and Uncertainty

Prospect Theory and Decision Under Risk or Uncertainty

Naïve Procrastination

Committing and Uncommitting

Selfishness and Altruism

Fairness and Psychological Games

Trust and Reciprocity

Filters

Exam 11: Disagreeing With Ourselves: Projection and Hindsight Biases

The hot-cold empathy gap refers to individual's inability to understand other's feelings.

Visceral factors may drive individuals to make decisions in a similar fashion to projection bias.

Hindsight bias occurs when we do not perfectly remember the information our past self had at the time of making a decision.

The hot state refers to which of the following:

Using projection bias to describe addictive behaviors allows us to model the idea that individuals were not aware of how consumption today would affect their desire to consume tomorrow.

Consider a model of inter-temporal choice, with utility function u(c1,c2)u\left(c_{1}, c_{2}\right)u(c1​,c2​) . If c1c_{1}c1​ and c2c_{2}c2​ are complements then which of the following must be true?

Rationality, Irrationality, and Rationalization

Transaction Utility and Consumer Pricing

Mental Accounting

Status Quo Bias and Default Options

The Winners Curse and Auction Behavior

Bracketing Decisions

Representativeness and Availability

Confirmation and Overconfidence

Decision Under Risk and Uncertainty

Prospect Theory and Decision Under Risk or Uncertainty

Naïve Procrastination

Committing and Uncommitting

Selfishness and Altruism

Fairness and Psychological Games

Trust and Reciprocity

Filters

Consider a model of inter-temporal choice, with utility function $u\left(c_{1}, c_{2}\right)$ . If $c_{1}$ and $c_{2}$ are complements then which of the following must be true?