Week10 - Cognitive Biases

• what are the two systems in the way we think

  i. automatic system - rapid and/or instinctive

  
  

  ii. reflective - more deliberate and self conscious
• define the default effect

  the tendency for an agent to generally accept the default option
• define the decoy effect

  also known as asymmetric dominance effect - an asymmetrically dominated alternative is dominated by one item in the set but not by another. adding such an alternative to a choice set increases the probability of choosing the item that dominates (Huber et al., 1982)