Which one would make people devote more effort which

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Which one would make people devote more effort? Which one would evoke more herustic behavior?
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Chapter 8 & 9: Decision Making Understand what is JDM Definition Three categories of JDM Judgement of likelihood Judgement of good/badness Judgement of mental and emotional accounting Understand specific types of JDM biases Attraction Effect Decision Framing Self-Positivity Biases Representative Heuristics Intuition based on implicit association Price-Quality Judgement Variety seeking tendency Social influence, implied negative correlation, and loss aversion
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Judgement and Decision Making Judgement of likelihood Decision making related to uncertainty and risk Judgement of goodness/badness Decision making related to preference Judgement of mental and emotional accounting Decision making related to gains & losses
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Mental Accounting Mental Accounting refers to the tendency that people categorize or code economic outcomes into different accounts based on subjective perception of gains and losses.
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Mental Accounting 1. An increase in a gain should be segregated. 2. An increase in (the absolute value of) a loss should be integrated 3. A decrease in a gain should be integrated (cancellation). 4. A small reduction in (the absolute value of) a loss should be segregated (sliver lining).
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JDM Biases Attraction effect When the addition of an inferior brand to a consideration set increases the attractiveness of the dominant brand.
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JDM Biases Toaster A (which has two slots, both wide enough for bagels, and costs $49) Toaster B (which has four slots, all wide enough for bagels and costs $89)
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JDM Biases Toaster A (which has two slots, both wide enough for bagels, and costs $49) Toaster B (which has four slots, all wide enough for bagels and costs $89) Toaster C has two slots, it costs $49, but it isn’t wide enough for bagels.
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JDM Biases Decision Framing The initial reference point or anchor in the decision process Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is to expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume the exact scientific estimate of the consequences of the programs are as the follows. Program A: “200 people will be saved.” Program B: “there is a 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved.”
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JDM Biases Self-Positivity Bias Positive illusion This term describes unrealistically favorable attitudes that people have towards themselves or to people that are close to them. Above-Average Effect This is a cognitive bias where individuals overestimate their own qualities and abilities.
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