QuestionsWhat is a framing effect? Provide an example from the exercise you just completed. Why are framing effects problematic for utility theory?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 exerciseâthat cannot be explained by utility theoryâmight be explained by reason-based choice. How emotions can cloud or facilitate a decision?
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