COGS 11 Lecture Notes - Lecture 7: Predictably Irrational, Sunk Costs, Decision-Making
Document Summary
Auction - (why would you pay more than in a rational mindset?) Maximizing locally, but digging yourself in a hole globally (ex: cold war - no one does the dishes) Sunk costs (already paid- can"t get those payments back) Instead of thinking this way - think about the resources you have left and what will yield the best outcome. The way you describe a situation with language can make a big difference, logically it shouldn"t - but it highlights certain features (ex- hamburger is 70% lean but 30% fat) About the idea that we make decisions based on what"s easiest to bring to mind. Based on that - it"s common or uncommon. Turns out k is more common on the 3rd. On how easy it is for you to bring it to mind example : listing 3 or 8 things about someone - after 8 things how much do i like this person after listing 8 things.
