BP 2.4

What is the central assumption of the econological model of decision-making?

• Decisions are emotionally driven

• People act randomly under pressure

• People have perfect knowledge and choose the option with the highest utility

• People ignore utility and act on instinct

Which concept describes accepting the first option that meets a minimum requirement?

• Maximizing

• Anchoring

• Satisficing

• Framing

What is bounded rationality primarily based on?

• Unlimited information and time

• Emotional biases only

• Limited cognitive resources and heuristics

• Fully rational analysis of all options

Which of the following is a typical heuristic?

• Systematic data modeling

• Always following a gut feeling

• Using a rule-of-thumb to make a fast decision

• Calculating the cost-benefit ratio in full detail

What best describes priming in decision-making?

• Using rewards to reinforce behavior

• A previously presented stimulus influencing a later decision

• Making decisions in groups

• Assessing risks based on facts

What is a key risk of groupthink in decision-making?

• Increased creativity

• Slower consensus

• Suppression of alternative views

• Better risk assessment

What is the confirmation bias?

• Ignoring irrelevant details when making decisions

• Overestimating risks when under stress

• Seeking evidence that supports one’s belief and ignoring opposing evidence

• Believing past decisions predict future success

The Dunning-Kruger effect refers to:

• Highly skilled people underestimating others

• Overconfidence in one's own abilities

• Emotional suppression during crises

• Reliance on others in groups

In the anchoring bias, what disproportionately influences decisions?

• The source of information

• The most recent piece of data

• The first piece of information presented

• The majority opinion in a group

Which bias causes people to believe they could have predicted an event after it already happened?

• Actor-observer bias

• Halo effect

• Hindsight bias

• Self-serving bias