COGS 100 Lecture Notes - Lecture 13: Ultimatum Game, Mental Accounting, Reciprocal Altruism

• School: Queen's University
• Department: Cognitive Science
• Course: COGS 100
• Professor: Farhana Zulkernine

Document Summary

Examples: ultimatum game, loss aversion, loss aversion and framing effect, mental accounting, endowment effect, sunk- cost fallacy. If you cheat someone now, they will probably cheat you later. Answer: avoid surcharge: we are more sensitive to losses than to equivalent gains. It also shows that we prefer choices that are framed positively rather than negatively. The endowment effect: one group is given a choice of investments, they chose based on how risk averse they are. Answer: they are more likely to stick with what they were given. 47% stayed with it, compared to 32% of those who had chosen it earlier. Explanation: in history people who held on to their stored food had better chance of survival because replacing them was time consuming, risky and energy intensive. Is the result of our te(cid:374)de(cid:374)(cid:272)y to sti(cid:272)k (cid:449)ith those thi(cid:374)gs (cid:449)e(cid:859)(cid:448)e already put a lot of ti(cid:373)e, energy, or money into although letting those go would be financially more reasonable.