chapter_17 - CHAPTER 17 SOLUTIONS AND MINI-PROJECT NOTES...

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CHAPTER 17 SOLUTIONS AND MINI-PROJECT NOTES CHAPTER 17 PSYCHOLOGICAL INFLUENCES ON PERSONAL PROBABILITY EXERCISE SOLUTIONS 17.1 The pseudocertainty effect applies to situations where the risk is reduced to zero for only a subset of possibilities and is not affected at all for the others. 17.2 Anchoring is used. You anchor on the higher values and think they are normal, so the price of $16.99 sounds really good. 17.3 The availability heuristic is responsible because mosquitoes are more likely to bother people, and many of the termites are in unpopulated areas. 17.4 a. The events in the second statement are a subset of the first. From Rule 4 in Chapter 16, we know that the probability of a subset of events cannot be higher than the probability of the full set. (Notice that personal probabilities are relevant here, but the rules should still apply.) b. They are likely to assign higher probability to statement B because of the excess detail. It is more representative of how people think such things could happen. 17.5 Bringing to mind a detailed, plausible scenario will increase your personal probability of it happening. An example is someone trying to sell you a car alarm by describing in detail the methods thieves use. 17.6 The solicitor was using "anchoring" by trying to anchor donors on the high value of $300. The resulting donations would probably be higher than they would be if the solicitor has said "we typically get donations of $25 to $50, how much can you give?" 17.7 The availability heuristic tells us that people assign higher probabilities to events they can readily bring to mind. By listing reasons why you might be wrong, you are actually bringing them to mind, and thus are
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This note was uploaded on 10/15/2011 for the course STAT 100 at Penn State.

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chapter_17 - CHAPTER 17 SOLUTIONS AND MINI-PROJECT NOTES...

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