PSYCH-UA 1 Lecture Notes - Lecture 9: Asymptote, Time Preference, Conjunction Fallacy
21 Aug 2016
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Document Summary
Thinking prospecting: uniquely human form of intelligence that enables us to think about far -future events expected utility theory: basic formula for how we say we should make decisions for the future. Whatever we value at a given moment, we want to get the most of it expected value = odds of gain x value of gain. If the coin lands on heads, i"ll give you . Odds of gain ( ) x value of gain () = . (the expected value) > (cost to play) it is worth to play! errors of odds: the odds are perceived differently from what they actually are. Sample size neglect: smaller samples are more likely to have more deviations from the normal (percentages have a wider range) The law of large numbers: when the sample is large, the average property of the sample closely resembles the average property of the population from which it was drawn.
