Chris Received an Advertisement Requesting a Donation for a Program

question 12

Multiple Choice

Chris received an advertisement requesting a donation for a program to help troubled youths. He was sympathetic because his own childhood had been difficult. The ad had a line with spaces to indicate the level of contribution, with the first space showing $30, followed by $60, $100, then $500 (Gold Support) , and a final blank space to write in the contribution. Before Chris saw the level of contribution line, he thought, "I'll give $20"; after seeing the contribution line, he wrote in $25 instead on the blank space. He later regretted having given more than he had first intended. To avoid giving the higher amount, Chris should have:

• A) thought about other times he had contributed to charities and the amounts he had given before.
• B) focused more on what he could afford and adjusted downward from the anchor provided to induce people to contribute more.
• C) realized that his lack of knowledge about probability would lead him to overestimate how much he could comfortably contribute.
• D) realized that the vividness of his memories of childhood would make the higher amount more available in memory.

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Definitions:

Payoff Table

A tabular representation of the outcomes of different decisions or strategies under various states of nature or scenarios.

Expected Opportunity Loss

The anticipated loss for not choosing the best possible option or course of action in decision-making processes.

Expected Monetary Value

A statistical technique in decision making used to calculate the average outcome when the future includes scenarios that may or may not happen.

Expected Value

The long-run average value of repetitions of the experiment it represents, often considered as the mean in probability.