1.

Complete the following sentences:

1. Sarah loves to listen to New Age music and faithfully reads her horoscope each day. In her
spare time, she enjoys aromatherapy and attending a local spirituality group. Based on this
description, is Sarah more likely to be a school teacher or a holistic healer? Many people
would identify her as a holistic healer based on …………. . She fits in with our existing ideas of
how a holistic healer might behave. In reality, it is far more likely that Sarah is actually a
school teacher based purely on probability. School teachers are far more common than
holistic healers. representative heuristic
anchor
2. When people are trying to make a decision, they often use an …….. or focal point as a
reference or starting point. Psychologists have found that people have a tendency to rely too
heavily on the very first piece of information they learn, which can have a serious impact on
the decision they end up making. In psychology, this type of cognitive bias is known as the
………………….. .
anchoring
representativeness heuristic
3. The …………… can play a major role in many real-life decisions and judgments. Consider, for
example, how members of a jury might determine a defendant's guilt or innocence. If the
accused looks like what the jurors think a criminal should look like, with a menacing
presence, scruffy face, and angry eyes, they might be more likely to perceive that individual
as guilty of the crime of which he or she is accused.

4. Imagine that you are trying to negotiate a pay raise with your boss. You might hesitate to
make an initial offer, but research suggests that being the first one to lay your cards down
on the table might actually be the best way to go. Whoever makes that first offer has the
edge since anchor
……… will essentially make that number the starting point for all further
negotiations. Not only that, it will bias those negotiations in your favor.

5. We tend to develop ideas about how people in certain roles should behave. A farmer, for
example, might be seen as hard-working, outdoorsy, and tough. A librarian, on the other
hand, might be viewed as being quiet, organized, and reserved. How well an individual fits
into these ideas of each profession affects our view of how probable it is they hold one of
Representativeness
these positions. This illustrates …………….. . bias

6. The availability
…………………….. bias is a mental shortcut that occurs when people make judgments about the
probability of events on the basis of how easy it is to think of examples. It operates on the
notion that, "if you can think of it, it must be important." The …………….. of consequences
associated with an action is positively related to perceptions of the magnitude of the
consequences of that action. In other words, the easier it is to recall the consequences of
something, the greater we perceive these consequences to be. Sometimes, this heuristic is
beneficial, but the frequencies at which events come to mind are usually not accurate
reflections of the probabilities of such events in real life.

7. Consider the debate over gun control. Sally, for example, is in support of gun control. She
seeks out news stories and opinion pieces that reaffirm the need for limitations on gun
ownership. When she hears stories about shootings in the media, she interprets them in a
way that supports her existing beliefs. Henry, on the other hand, is adamantly opposed to
gun control. He seeks out news sources that are aligned with his position. When he comes
across news stories about shootings, he interprets them in a way that supports his current
point of view. These two people have very different opinions on the same subject and their
interpretations are based on that. Even if they read the same story, confirmation
…………………………. bias tends
to shape the way they perceive it
2. How many of the following pairs show a good fit?

- System 1, heuristics
- System 2, effortful
- System1, intuition
- System 2, deliberative

A. Only one pair

B. Exactly two pairs
C. Exactly three pairs
D. All pairs

3. Complete the sentence.

Insurance company Safe-T in the US was able to observe that after the launch of an intensive media
campaign in which dramatic images of domestic fires and its consequences were shown, more
people took on fire insurance. Furthermore people on average also took on fire insurances that had
a wider cover. This observation can partly be understood by applying the concept of ……………….. .

A. availability bias
B. confirmation bias
C. overconfidence
D. representativeness bias

4. Assess the following statements:

1. Schwartz points towards a number of mechanisms that can explain why choice overload has
negative effects. These include (among others) increased regret and lower opportunity costs.
2. Schwartz points towards a number of mechanisms that can explain why choice overload has
negative effects. These include (among others) choice paralysis, and higher personal standards.
3. Schwartz points towards a number of mechanisms that can explain why choice overload has
negative effects. These include (among others) decreased personal responsibility with the
potential for post-choice self-blame.
4. A potential avenue to counter the negative effects of choice overload is to adopt a satisficing
strategy.

A. Exactly one of the statements above is correct.

B. Exactly two of the statements above are correct.
C. Exactly three of the statements above are correct.
D. All of the above statements are correct.

5. Complete the sentence.

Lottery organizers heavily promote the jackpot winners, people are continually hearing about those
who’ve won big. On the other hand they hear almost nothing about the vast majority of people who
haven’t won anything. As a consequence, people assume they are much more likely to win the
lottery than they really are. This observation can partly be understood by applying the concept of
……………….. .

A. anchoring bias
B. confirmation bias
C. representativeness heuristic
D. availability bias

6. Assess the following options.

A group of experienced HR-managers is asked which of two applicants for a particular job is the best
based on their scores on 10 sequential tests which are each equally important for that job (higher
scores predict better performance on the job). Below you can see the scores of both applicants on
each of the tests. As you can check, both applicants perform equally well (identical mean scores
across the 10 tests, both means = 6.8). However, almost all HR-managers assess candidate B as the
best candidate for the job based on these scores. Which of the following mechanisms can explain
this?

Applicant A: 3 - 5 - 6 - 4 - 8 - 7 - 9 - 8 - 9 – 8
Applicant B: 8 - 9 - 8 - 9 - 7 - 8 - 4 - 6 - 5 – 3

A. framing
B. representativeness bias
C. anchoring bias
D. confirmation bias

7. Donnations…

Setting a minimum suggested donation amount can similarly drive up average donations. In this
example, the values start at £20. If I want to give less than that, I have to manually enter my measly
amount in the free box.
Which of the following mechanisms is this organization trying to use to influence the amount of your
Nudging
donation? ……………………………………..

8. Complete the sentence

The picture below illustrates how we can be influenced by small differences in the choice
architecture, and that this can result in large behavioral effects. We call this nudging
………….. (i.e., changing
small things to a situation without classic direct instruction, legislation, or enforcement).

The wording below the picture is a case of ………… , and that on the right one of …………. .
opting in opting out

9. Complete the sentences. not treated this in class

Consider, for example, a choice of college. In order to determine their optimal decision outcome,
…….. feel compelled to examine each and every alternative available. …………………… rely heavily on
external sources for evaluation. Rather than asking themselves if they enjoy their choice, they are
more likely to evaluate their choices based on its reputation, social status, and other external cues.
In contrast, ……………………….. asks whether her college choice is excellent and meets her needs, not
whether it is really “the best.”

Overall, …….. generally achieve better outcomes than …………………. . For example, a study found that
recent college graduates scoring high on …………….. accepted jobs that paid 20% higher starting
salaries than their …………….. peers. Despite higher salaries, however, these ……………… students were
less satisfied with the jobs they accepted. Why? Once ……………. have made a choice (e.g., a job
offer), they are likely to second guess themselves, and wonder whether they could have made a
better choice. They are more prone to make social comparisons in order to gauge the optimality of
their decisions.
Use some of the following terms (a single word can be used multiple times): heuristic, anxious,
maximizers, satisficers, maximizing, satisficing, system 1, system 2, confirmation bias, negotiators,
intuitive, rational, regretful.

10. Complete the sentence.

Dan Ariely suggests that one way to prevent yourself from making bad decisions on important
adopt the perspective of an .outsider
issues, and as such avoiding the pitfalls of system 1… thinking, is to ……………………………………………..