Why do we make irrational decisions?

The concept of "loss aversion" suggests that...

• people are afraid of losing money.

• the pleasure of gaining something is equal to the pain of losing it.

• the psychological impact of a loss is twice as strong as the satisfaction of an equal gain.

• people are more likely to take risks to gain something.

What is a "heuristic"?

• A logical, step-by-step analysis.

• A problem-solving approach based on experience and intuition.

• A common mistake in mathematical calculations.

• A type of cognitive bias related to numbers.

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The video uses an example with rolling a die to explain a heuristic related to probability. Why do people often choose the longer, less probable sequence of colors?

• Because it's a shorter and simpler choice.

• Because it contains more of the color their brain expects to see.

• Because they calculate the mathematical probability correctly.

• Because they are told it is the correct answer.

The "anchoring effect" demonstrates that...

• people's guesses are influenced by initial, even irrelevant, numbers.

• people are good at estimating numbers accurately.

• it is important to have an "anchor" or main idea when making a decision.

• people's first impressions are always correct.

According to the video, what was the original purpose of using heuristics?

• To solve complex mathematical problems.

• To make sure our decisions are always rational.

• To help us make friends and build societies.

• To act as a survival mechanism for making quick decisions.

What is the final advice the video gives for making better decisions?

• To completely eliminate all mental shortcuts.

• To always trust your first intuition.

• To be aware of your biases and pause to think, especially with numbers and probability.

• To study mathematics and statistics in detail