Questions -
1. What is a framing effect? Provide an example from the exercise you just completed. Why are framing effects problematic for utility theory?
2. In what kinds of situations are people risk-seeking and risk-averse when making a decision? Why is it hard for people to reason statistically?
3. What is reason-based choice vs. emotions-based choice? Explain how one of your decisions from this exercise that cannot be explained by utility theory might be explained by reason-based choice. How emotions can cloud or facilitate a decision?