Week9 - Politics, Rationality & Emotions

• what is intuition built on

  emotional memory which is easier to retrieve than factual memory
• In interactive environments what do emotions equip us with


  they equip us with a commitment device i.e. please report back tomorrow for a new flight
• define and give the advantages and disadvantages of a lab and field experiment

  lab - simulated environment in the lab

  
  

  field - real world setting

  
  

  advantages:

  i. better control of extraneous variables

  ii. cost and time efficient

  iii. replicable

  
  

  disadvantages:

  i. internal validity limitation due to too many controls
• what is the shown through trust games and what is trust affected by

  it is shown how agents deviate from optimal outcomes by showing altruism or punishing unfairness

  
  

  trust is significantly affected by the amount at stake and by economic development
• what are the potential determinants of trust games

  individual preferences:

  i. personality traits - risk preferences etc

  ii. personal values/beliefs - morality, sense of fairness etc

  
  

  cultural differences:

  i. social norms - traditions, customs

  ii. institutions - trust on legal enforcing mechanisms
• what is individual behaviour influenced by


  individual behaviour is influences by the behaviour of pers (peer effect) - a social interaction network within a particular environment.
• what is the effect of biases and what do they refer to

  biases refer to cognitive fallacies where agents deviate from rational choice
• why do agents become bias

  its a way of taking shortcuts in decision making by using heuristic or prior beliefs - there's a lack of information or time to process.

  
  

  an evolutionary explanation could be that the human brain is programmed for survival tasks
• explain conformity bias

  conforming with others view provides comfort

  
  

  - crowd behaviour

  - investors herding