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FSU - PHI 2100 - Final Study Guide - Study Guide

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FSU - PHI 2100 - Final Study Guide - Study Guide

School: Florida State University
Department: Philosophy
Course: Reasoning and Critical Thinking
Professor: Michael Bishop
Term: Summer 2015
Tags: reasoning and Psychology
Name: Final Study Guide
Description: This covers all concepts after the last exam, abbreviated.
Uploaded: 12/08/2017
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background image Implementation Intentions ● Very specific intentions you can implement to counteract weakness of will and the  planning fallacy ○ Specify very contentful intentions, i.e. at 6 PM on Wednesday next week, I’m  gonna sit down and start researching articles. St. Petersburg paradox ● Fair coin tossed in sturdy chance setup. ● Tossed one. If heads, you get 2 dollars and the game stops. ● If not, toss again. If heads, 4 and stop. ● If not, toss again. If heads, you get 8. ● And so on. ● EMV dictates you put infinite value. Utiles solve by causing it to decrease with  diminishing marginal returna Bernoulli’s utility function ● Understood using the table given by Bernoulli of millions to utiles. ● Wealth (Millions­utiles)­1­10, 2­30, 3­48, 4­60, 5­70, 6­78, 7­84, 8­90, 9­96, 10­100. ● Utility of gambles is the total utility of the gamble’s outcomes divided by the probability. ○ For instance, when choosing between a gamble that can yield 1 or 7 million or a  certain 4 million, people overwhelmingly pick the 4M because they are risk  averse. ■ Why? Because 1 million gives 10 and 7 million gives 84, and 1+84=94.  Divide that by two because it is a 50­50 gamble, which gives you 47.  47<60, which is the utile value of 4 million. Bernoulli’s error ● Bernoulli’s account of risk attitudes overlooks the importance of change in wealth  relative to reference points. Prospect Theory
background image ● As you go further in loss or gain, further change to you is desensitized. Kahneman calls  this diminishing sensitivity. ● Rectangles aren’t the same size on both sides of the graph. It’s longer on the bottom  because the curvature of the line is steeper, due to loss aversion. ● Loss aversion: Losses loom more heavily than gains in our psychology, weighing twice  as heavily as gains. Loss Aversion ● Finding your own ratio: ● Consider a 50­50 gamble in which you can lose 10 dollars. What is the smallest gain that  makes it attractive. ○ If 10, then you are indifferent. ○ If less than 10, you see risk. ○ If more than 10, you don’t see risk. Mixed gambles vs. bad choices ● Produce different behavior with respect to risk. ○ Risk averse vs. risk seeking. Either you wish to avoid any risk of a greater loss or  you seek something that invokes the probability of a greater loss. ● Why does taking the sure loss sometimes constitute the better decision? ○ The sure loss is better than a bigger, probable loss. You’re gonna lose more over  time. Gambles vs a sure thing ● Consider this choice ○ A1: Equal chances of 1 million or 7M ○ A2: 4M with certainty. ● They both have the same EMV of 4M. You pick 4M overwhelmingly because the  guaranteed loss is much smaller than the probable loss. Competition neglect ● WYSIATI
background image ○ Focus on our own goal and situation and neglect information about similar cases  (base rate neglect). ○ Focus on our skills and ignore those of others. ○ Illusion of control: Focus on the causal role of skill and ignore the role of luck. ○ When dealing with unknown unknowns, add base rate. Driving skill assessment ● Consider these questions: ○ Are you a good driver? ○ Are you a better than average driver? ■ 90% say yes to the second because they’re thinking about their own skills,  spurred on by the first questions. People think about their own skills but  don’t really think about the average even when they compare themselves  to it. Question substitution due to heuristics. Endowment effect ● People ascribe more value to things merely because they own them. ● Example: Wine collecting economist. ○ Large gap between buying and selling. ○ Never buy at higher than 35 dollars. ○ Never sell for less than 100 dollars. ● Differs from sunk­cost fallacy, because that’s factoring into future decisions, and has to  do with how one has to pay for them. Overconfidence ● Bias in which subjective confidence in one’s judgments is reliably greater than the  objective accuracy of those judgments, especially when confidence is relatively high. ● We mistakenly want overconfident experts because they create the illusion that they  know what they’re doing. Financial Forecasts

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School: Florida State University
Department: Philosophy
Course: Reasoning and Critical Thinking
Professor: Michael Bishop
Term: Summer 2015
Tags: reasoning and Psychology
Name: Final Study Guide
Description: This covers all concepts after the last exam, abbreviated.
Uploaded: 12/08/2017
8 Pages 44 Views 35 Unlocks
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  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!
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