10-21-08 Notes

10-21-08 Notes - i. Tries to integrate perspectives of many...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Models of Decision Making Try to account for, or model, how people should, could, would or do make decisions. 1. (Subjective) Expected Utility Theory a. (Bernoulli; von Neumann & Morgenstern; Savage) b. Normative theory of decision making c. How people should make decisions in order to maximize gains i. Based on probabilities ii. SEU = U(x1)P(X1) d. How to assign values to U and P? i. Ordering alternatives = Compare any two decision alternatives ii. Dominance = Select the “better” alternative iii. Cancellation = Ignore any common alternatives iv. Transitivity = A > B > C then A > C v. Continuity = Prefer higher outcome even if benefit not immediate e. When SEU doesn’t work i. Allais Paradox (named for Maurice Allais) 2. a. Possible losses have more “value” (impact) than possible gains b. Differences between buyers and sellers c. Anticipated regret 3. Other issues a. Decision Neuroscience
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: i. Tries to integrate perspectives of many areas: 1. Economics = Mathematical models of decision making. 2. Psychology = Decision making based on human capabilities and constraints. 3. Neuroscience = Operation of neural systems in decision making. 4. “Neuroeconomics” b. Brain areas involved in decision making (see Sanfey) i. Striatum and Basal Ganglia (BG) = Rewards and punishments (dopamine receptors) ii. Medial Prefontal Cortex (MPFC) = Planning, prediction and expectations c. Bias “Blind Spot” (Pronin) i. Blind spot in eye is place where optic nerve goes to brain ii. Implication for decision biases 1. Analogy: You also don’t notice or see your own decision biases Thus, 2. You are unaware of possible biases – you don’t see a problem 3. You don’t try to correct for any biases – if there’s no problem why do anything...
View Full Document

This note was uploaded on 05/04/2009 for the course PSYC 065 taught by Professor Sanna during the Fall '08 term at UNC.

Page1 / 2

10-21-08 Notes - i. Tries to integrate perspectives of many...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online