Question

Which model of decision-making relies on simplifying strategies or rules of thumb based on past experiences, fairness, past events, and aversion to loss?

• A. Bounded rationality model
• B. Judgment heuristics and biases model
• C. Social model
• D. Economic rationality model
• E.

Hint:

Heuristics are mental shortcuts that simplify decision-making, often at the cost of biases.

Answer 1

The Correct Option is B

Step 1: Definition of Heuristics and Biases:
This model explains decision-making based on simplifying strategies or rules of thumb derived from past experiences and events.
Step 2: Eliminating Other Options:
- Bounded rationality considers cognitive limitations but not explicitly heuristics.
- Social and economic rationality models focus on social interactions and economic factors, respectively.
Step 3: Correct Model:
The correct model is Judgment heuristics and biases.