Discounted Utility
A concept in behavioral economics that describes how future benefits are perceived as less valuable than immediate ones.
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“user decision-making”
Ambiguity Effect
A cognitive bias where decision-making is affected by the lack of information or uncertainty.
Allais Paradox
A decision-making paradox that shows people's preferences can violate the expected utility theory, highlighting irrational behavior.
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.
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.
Active Choice
A decision-making strategy where individuals are prompted to make a choice rather than defaulting to a pre-set option.
Myopic Loss Aversion
A cognitive bias where individuals tend to avoid risks when they perceive potential losses more acutely than potential gains.
Anchoring
Anchoring (also known as Focalism) is a cognitive bias where individuals rely heavily on the first piece of information (the "anchor") when making decisions.
Conjunction Fallacy
A logical fallacy where people assume that specific conditions are more probable than a single general one.