PSYC 213 Lecture Notes - Lecture 19: New York Lottery, Expected Utility Hypothesis, Loss Aversion
Document Summary
Von neumann & morgenstern"s grand theory of human decision-making: Individuals have precise information about the consequences of their actions. Individuals have sufficient time and processing resources to weigh alternatives. If there is a trade-off between speed and accuracy where things that are done quickly are yet accurate, then there are several factors coming into play. In rational choice making, nothing is rushed: all decisions are forward looking (i. e. , disregard what happened in the past) Probability of an outcome multiplied by the value of that outcome. Outcomes: when you die, you learn that either god exists or god does not exist. Expected utility (believe) > expected utility (don"t believe) What is in the squares in the middle is the value . If you believe in god and he turns out to exists, then you will go to heaven (which has a lot of value)
