3 - Compute the decision with perfect knowledge - you would...

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Compute the decision with perfect knowledge - you would pick die C, if 1 or 2 was going to come up… etc 30$ for sure, or a gamble in which you toss a coin that you can win 100 or 0 - how much should you pay to find out which side of the coin will come up .5(100) + .5(30) = 65 You will choose the gamble if you know it will be heads, you will choose the sure thing if you know it will be tails 65 – 50 = 15 Heuristics in probability judgments - availability heuristic – people asses the probability of an event based on the degree to which instances are readily available o Probability of nuclear disaster after the tsunami in Japan, people will give high probabilities (if you ask the question the day before, the probabilities will be far lower) o If you can think of it, it must be important o Vivid associations – we focus on information that is vivid, which affects our logic and probability Save the children: Donation request - Anchoring heuristic – people start with an anchor then adjust up or down, but
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This note was uploaded on 10/23/2011 for the course PPE 253 taught by Professor Mellers during the Fall '11 term at UPenn.

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3 - Compute the decision with perfect knowledge - you would...

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