Cognitive Psychology: Information Processing and Decision Making Study Guide

Introduction to Economic Psychology

An overview of economic psychology, its definition, and its relationship to behavioral economics and decision-making processes.

• psychological mechanisms of economic behaviour
• consumption and satisfaction of needs
• deviation from classical economic models
• Homo Economicus vs real human behaviour
• anchoring effect
• cognitive biases in decision-making
• heuristics and intuition
• consumer behaviour and psychological schools
• attention economy

Information Processing and Cognitive Psychology

An exploration of cognitive psychology, the information-processing approach, and the processes of sensation, perception, and attention.

• Cognitive psychology
• Information-processing approach
• Computer metaphor
• Sensation
• Perception
• Bottom-up processing
• Top-down processing
• Perceptual constancy
• Object recognition
• Selective attention
• Stages of information processing

• Information Processing and Cognitive Psychology

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Attention and Information Processing Mechanisms

This topic explores how attention allocates limited cognitive resources through selective attention, automaticity, and various filter models.

• Subliminal advertising
• Stroop effect
• Selective attention
• Controlled attention
• Automatic attention
• Broadbent’s filter model
• Dichotic listening
• Shadowing
• Treisman’s Attenuation Model
• Cognitive load
• Perceptual load

Introduction to Human Memory Systems

• Sensory memory
• Short-term memory (STM)
• Long-term memory (LTM)
• Chunking
• Primacy and recency effects
• Episodic memory
• Semantic memory
• Procedural memory

Foundations of Memory and Cognitive Processes

An overview of memory systems, information processing, and the cognitive processes of sensation, perception, and attention.

• Long term memory
• Short term memory
• Sensory memory
• Loop memory
• Sensation
• Perception
• Attention
• Subliminal advertising
• Information processing approach

Foundations of Selective Attention and Memory

The brain utilizes selective attention to filter information and manage cognitive processing.

• selective attention
• controlled attention
• automatic attention
• information filtering
• unattended message
• cognitive load

Foundations of Memory and Cognitive Processes

An exploration of memory systems, information processing approaches, and the cognitive processes of sensation, perception, and attention.

• Long term and short term memory
• Information processing approach
• Sensory memory
• Sensation
• Perception
• Attention
• Subliminal advertising
• Unconscious processing

Foundations of Attention and Memory

An exploration of selective attention, cognitive capacity, and the filtering of information within human memory systems.

• selective attention
• controlled attention
• automatic attention
• cognitive capacity
• perceptual load
• sensory memory
• information filtering

Foundations of Memory and Heuristics

An exploration of the underlying mechanisms of sensory, short term, and long term memory alongside the definition of heuristics as mental shortcuts.

• Sensory memory
• Short term memory
• Long term memory
• Episodic memory
• Procedural memory
• Semantic memory
• Chunking
• Memory hangar
• Primacy and recency effect
• Heuristics

Mechanisms of Decision Making and Heuristics

An exploration of decision-making processes, dual-system information processing, heuristics, and cognitive biases.

• Heuristics
• Cognitive bias
• Availability heuristic
• Dual-system division

Cognitive Heuristics in Complex Decision Making

An analysis of cognitive heuristics, including anchoring, loss aversion, the endowment effect, and various psychological biases that influence human judgment and social behavior.

• Anchoring
• Loss Aversion
• Endowment Effect
• Psychological Ownership
• Confirmation Bias
• Risk Compensation
• Social Conformity
• Framing Effect

Nudge Theory and Choice Architecture

Research on social norms, sludge, shrouded attributes, and dark patterns within choice architecture.

• Social norms
• Descriptive social norms
• Injunctive norms
• Sludge
• Shrouded attributes
• Dark patterns
• Choice architecture
• Social proof
• Scarcity
• Defaults

Understanding Self-Nudging and Choice Architecture

Self-nudging involves conscious self-guidance and deliberately setting up constraints to avoid making poor decisions by using strategies like increasing friction or changing the physical environment.

• Self-nudging
• Choice architecture
• Self-control
• Autonomy
• Friction
• Psychological mechanisms
• Habitual behaviour
• Fact box
• Self-imposed commitments
• Defaults

Intuition and Decision-Making Processes

This content explores experience-based intuition, analytical processes, and the impact of valid versus non-valid environments on decision-making.

• Experience-based intuition
• Imperfect intuition
• Valid environments
• Non-valid environments
• Analytical processes
• Defensive decision-making
• Fluency heuristic
• Expert vs. layperson decision-making

Assumptions of the Homo Economicus Model

An examination of the core assumptions of the Economic Man model and the critiques provided by behavioral economics.

• Homo Economicus assumptions
• Stable and consistent preferences
• Solitary decision makers
• Utility maximisers
• Satisficing and bounded rationality
• Perfect knowledge vs uncertainty
• Unbounded computational capabilities
• Willpower and energy expenditure
• Behavioral economics vs conventional economics

History of Economic Psychology and Behavioral Economics

• Cognitive tradition in psychology
• Integration of psychology and economics
• Financial psychology and human experience with money
• Prospect theory and cognitive distortions
• Loss aversion and mental accounting
• Empirical demonstration of decision-making deviations

Heuristics and Cognitive Biases

Heuristics are mental shortcuts or rules of thumb used to reach judgments and decisions quickly, while cognitive biases are systematic patterns of judgment that can lead to inaccurate or normatively inappropriate conclusions.

• Heuristics
• Cognitive biases
• Availability heuristic
• Representativeness heuristic
• Ease of retrieval
• Similarity
• Base rates
• Conjunction fallacy

Dual Process Theories of Cognition

Dual-process theories distinguish between fast, automatic processing and slower, more controlled processing.

• Dual-process theories
• Cognitive biases
• Heuristics
• Automatic processing
• Controlled processing
• Cognitive load
• Cognitive conflicts

Foundations of Memory and Heuristics

An exploration of cognitive capacity, memory systems including sensory, short-term, and long-term memory, and the definition of heuristics as mental shortcuts.

• Cognitive capacity
• Perceptual load
• Selective attention
• Sensory memory
• Short-term memory
• Long-term memory
• Episodic memory
• Procedural memory
• Semantic memory
• Chunking
• Primacy and recency effect
• Heuristics

Foundations of Heuristics and Cognitive Biases

Heuristics are mental rules used for rapid decision making that can contribute to cognitive biases and errors in judgment.

• Heuristics
• Cognitive Biases
• Availability Heuristic
• Ease of Retrieval
• Base Rate Logic
• Conjunction Fallacy

Decision Making and Cognitive Shortcomings

An analysis of decision making shortcomings involving availability and judgment errors in estimating frequency and group membership.

• availability
• difference in estimated frequency
• judgment
• distribution
• stereotypes

Information Connectivity and Representative Judgment

An exploration of how the brain utilizes information connectivity and stereotypes to influence judgment and probability calculations.

• Cognitive Heuristics
• Base Rate Calculation
• Stereotypical Descriptions
• Information Connectivity
• Social Inclusion
• Probability vs. Personal Characteristics

Nudge and Choice Architecture Principles

A nudge is any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives.

• Choice architecture
• Libertarian Paternalism
• Defaults
• Social norms
• Reminders
• Simplification
• Feedback
• Implementation Intentions
• Checklists
• Self-control issues

Principles of Effective Choice Architecture

This topic explores how choice architecture and nudges can facilitate better decision-making through feedback, defaults, and error-resistant design.

• Nudge
• Choice architecture
• Feedback
• Automatic System
• Stimulus-response compatibility
• Channel factors
• Defaults
• Inertia
• Status quo bias
• Active choosing
• Prompted choice
• Forcing function
• Error-resistance
• Mapping choices to outcomes
• Heuristics
• Elimination by aspects

Heuristics, Intuition, and Decision-Making

This module explores how heuristics and intuition support decision-making when distinguishing between risk and uncertainty.

• Risk versus Uncertainty
• Certainty
• Zero-risk illusion
• Calculable risk illusion
• Turkey illusion
• Heuristics
• Intuition
• Statistical thinking

Adaptive Toolbox and Recognition Heuristics

The adaptive toolbox contains different heuristics for different problems, including recognition-based heuristics that rely on familiarity to make decisions.

• Adaptive toolbox
• Heuristics
• Unstable-world principle
• Ecological rationality
• Recognition-based heuristics
• Recognition heuristic
• Less-is-more effect

Decision Making Heuristics and Strategies

This module explores various heuristics including one-reason, equality-based, aspiration-based, and social heuristics used to make decisions.

• Fluency Heuristic
• One-Reason Heuristics
• One-Clever-Cue Heuristic
• Fast-and-Frugal Trees
• Take-the-Best Heuristic
• Delta-Inference Heuristic
• Equality-Based Heuristics
• Aspiration-Based Heuristics
• Satisficing
• Social Heuristics
• Wisdom-of-Crowds Heuristic
• Word-of-Mouth Heuristic

Group Dynamics and Decision Making

This module explores the characteristics of groups, ingroup-outgroup dynamics, group polarisation, and the phenomenon of groupthink.

• Definition of group
• Characteristics of groups
• Ingroup-Outgroup
• In-group differentiation
• Homogeneity bias
• Group polarisation
• Persuasive arguments theory
• Social comparison
• Self-categorization theory
• Risky Shift
• Groupthink
• Antecedents of groupthink
• Symptoms of groupthink
• Solutions to avoid groupthink

The Index of Consumer Sentiment

An overview of the Index of Consumer Sentiment, its history, its role as a leading economic indicator, and its application within economic psychology.

• Index of Consumer Sentiment
• subjective feelings about financial situations
• leading indicator of future economic activity
• predictive validity for economic developments
• economic psychology research areas
• consumer expectations and attitudes
• impact of psychological indicators on economic behaviour

• The Index of Consumer Sentiment: Bridging Psychology and Economics

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Elaboration-Likelihood Model of Persuasion

The elaboration-likelihood model is a theory of persuasion that suggests there are two different ways people can be persuaded depending on how invested they are in a topic.

• Elaboration-Likelihood Model
• Central route processing
• Peripheral route processing
• Heuristic–systematic model
• Cognitive heuristics
• Dual-system theories

Foundations of Heuristics and Cognitive Biases

An exploration of how heuristics serve as decision-making tools that can lead to cognitive biases through ease of retrieval and base rate neglect.

• Heuristics
• Cognitive Biases
• Availability Heuristic
• Ease of Retrieval
• Base Rate Logic
• Conjunction Fallacy

Foundations of Memory and Dual Process Theories

This content explores the representativeness heuristic and the dual process theories of system one and system two logic.

• representativeness heuristic
• system one logic
• system two logic
• dual process theories
• stereotypes
• cognitive load
• mastery

Dual Process Theories and Heuristics

An exploration of dual process theories involving system one and system two logic and the role of the representativeness heuristic in decision making.

• representativeness heuristic
• system one logic
• system two logic
• dual process theories
• stereotypes
• cognitive load
• mastery

Representativeness Heuristic and Decision Making

The representativeness heuristic involves judgments based on the similarity between an outcome and a model, often leading to cognitive fallacies.

• Representativeness heuristic
• Gambler's fallacy
• Hot hand fallacy
• Conjunction fallacy
• Negative recency
• Positive recency
• Law of small numbers

Decision Making and Cognitive Biases

An examination of decision making shortcomings including anchoring and adjustment, prospect theory, loss aversion, and the endowment effect.

• Anchoring and adjustment heuristic
• Prospect Theory
• Loss aversion
• Endowment effect
• Psychological ownership
• Reference point
• Willingness to pay vs. willingness to accept

Decision Making and Its Shortcomings

An analysis of cognitive biases and psychological effects that influence human decision making and perception.

• Confirmation bias
• The Peltzman effect
• Risk Compensation
• Belief Bias
• The bandwagon effect
• Asch Conformity Experiments
• Blind Spot Bias
• Naive Realism
• Introspection Illusion
• Framing effect
• Prospect Theory
• Loss aversion

Cognitive Heuristics and Decision Making

An exploration of how the brain uses patterns, small numbers, and anchors to create biases in complex decision making.

• Pattern recognition
• Small number bias
• Generalization
• Self-fulfilling prophecy
• Anchoring
• Cognitive bias

Group Dynamics and Decision Making

This module explores the definition of groups, ingroup-outgroup dynamics, group polarisation, and the phenomenon of groupthink.

• Definition of group
• Characteristics of groups
• Ingroup-Outgroup
• In-group differentiation
• Homogeneity bias
• Group polarisation
• Persuasive arguments theory
• Social comparison
• Self-categorization theory
• Risky Shift
• Groupthink
• Antecedents of groupthink
• Symptoms of groupthink
• Solutions to avoid groupthink