Probability Matching
A decision-making strategy where individuals allocate resources proportionally to the probability of an outcome occurring, rather than optimizing the most likely outcome.
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“decision clarity”
Allais Paradox
A decision-making paradox that shows people's preferences can violate the expected utility theory, highlighting irrational behavior.
Regret Aversion
A tendency to avoid making decisions that might lead to regret, influencing risk-taking and decision-making behaviors.
Hick’s Law
A principle that states the time it takes to make a decision increases with the number and complexity of choices available.
Cost-Benefit
An analysis comparing the costs and benefits of a decision or project to determine its feasibility and value.
Representativeness
Representativeness is a heuristic in decision-making where individuals judge the probability of an event based on how much it resembles a typical case.
Recognition Heuristic
A cognitive shortcut that relies on the recognition of one option over another to make a decision, often used when individuals have limited information.
Sunk Cost Fallacy
The tendency for individuals to continue a behavior or endeavor as a result of previously invested resources (time, money, or effort) rather than future potential benefits.
Opportunity Cost Neglect
A cognitive bias where individuals overlook or underestimate the cost of opportunities they forego when making decisions.