Judgement and Decision Revision

sorts of things you should probably know 

  1. Be able to describe different approaches in judgment and decision making (normative, descriptive),
  2. be able to explain expected utility and expected value, and how these concepts have shaped DM theories
  3. Explain how people conform to normative/prescriptive models of decision making
  4. be able to give examples of biases and heuristics (mental shortcuts) people use when making judgments
  5. outline prospect theory and provide evidence for and against it
  6. Discuss the concept of bounded rationality and what research on heuristics and biases can tell us about human rationality
  7. Outline broadly the dual process models in decision-making (thinking fast and slow)


example exam questions

  1. Prospect Theory (Kahnemann & Tversky, 1979) and related work on heuristics had a major influence on concepts of human judgment and decision-making. Critically discuss the evidence and arguments for (or against) this line of work.
  2. Are humans poor at thinking?


multiple choice and quizzes




questions you should mostly be able to answer

  1. Define decision making p2
  2. What is normative & prescriptive vs descriptive decision making? p2&4&7slide20
  3. Define judgement
  4. How does Bernoulli calculate expected value? p3
  5. Name some problems with normative/ value approach p4 
  6. Define Bernoulli’s (1738)/von Neumann’s (1944) subjective expected utility p5 
  7. What’s the difference between expected utility and expected value?
  8. What are the 4 assumptions/ axioms of SEU?
  9. Which assumption does the Linda problem violate? p6
  10. What is Edwards’ probability preference?
  11. Define Simon’s (1957) bounded rationality p7&p19
  12. What is Kahneman’s anchoring effect? p8
  13. Define the Representative Heuristic and give an example p8 
  14. What is the gambler’s fallacy? p9
  15. Define heuristic vs algorithm. What is consequence of using heuristics? p9
  16. Define the availability heuristic and give an example
  17. Define the overconfidence and hindsight biases p10
  18. What underlies how heuristics work and can you give an example? 
  19. According to Kahnemann what’s the difference in people’s attitude when it comes to winning & losing?
  20. What is framing and what axiom does it violate? p11
  21. What evidence is there that people don’t adhere to normative models of decision making? p12 
  22. In prospect theory what are the 2 phases in decision making p12 
  23. Talk about the prospect theory graph, axes and how they were derived p12
  24. What’s the endowment effect? p14
  25. What’s the sunk cost effect & what’s the reason behind it? p14&15
  26. In prospect theory (PT) how are subjective probabilities distorted and in what real life scenario do we see this?
  27. Can you think of evidence/studies to support PT and what phenomena it links to? p15&16 
  28. What is omission bias and give an example p16
  29. What are maximizers and satisficers and how does this cause a problem for PT? p17 
  30. What were the findings regarding risk averse and risk seeking individuals? p19
  31. What is the Recognition heuristic and give an example. p20
  32. What is Baye’s theorem p.20 
  33. What was Gigerenzer’s observation about frequency vs probability problem presentation and what is the reason behind it? p21
  34. Why do Tooby & Cosmides think we get these problems wrong? p23
  35. Give me some critiques of heuristics p.22 
  36. Give me some critiques of PT 
  37. What about single vs multiple bets? p.23
  38. What about intelligence? p24
  39. Describe Kahneman/Stanovich’s system 1&2 p24

many answers to these questions can be found here