lab six

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Southern New Hampshire University *

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105

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Economics

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Jun 1, 2024

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docx

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Strategy Winning Percent Stay with initial door 0.167 Switch to other door 0.417 1

The predicted results implied that if I was to choose the door at random, then a switch, or stayed at a random door, I should be accurate 50 percent of the time. If I decided to pick a door at random and I stayed with the one I picked, then I should be right about 33 percent 2

of it. If I decided to pick a door randomly and keep changing it, I must be correct at about 66 percent. I decided to try two different ways. One way, I chose a random door; then I would switch and keep switching until I understood how it was going. I felt it was not the door I wanted when I picked it up, so I had to keep switching. When I would pick and get it wrong, I picked that one after I switched from the pick, and it was the door that was with the original prize. I do feel that switching my choice led to better odds in the long run because changing increases my chances of getting it right. As predicted, I should be right 33 percent of the time if I never change my choice. In the end, you will win if you change your first choice. Condition Mean Number of Cards Correct Abstract 1.333 Thematic 1.000 3

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You should expect that your knowledge of your surroundings and the world helps you pick the two cards that go together. However, in an exact situation, you do not have much information and require varies mainly on reasoning. 4

The Wason Selection task tells us that discovering assertions with our beliefs is much easier than learning misrepresentation of one's beliefs. It is much easier to learn a sensible answer to the cards rather than if it was to explore other truths. As part of human nature, we fid it much easier to find rational solutions to our issues rather than it is to think theoretically. 5

Condition Less Risky More Risky Small Gain 0.750 0.000 Large Gain 1.000 0.000 Small Loss 0.750 0.000 Large Loss 1.000 0.250 6

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The predicted results showed that a person prefers a sure gain over a risky gain and a risky loss over a sure loss of a firm amount. My results best matched the results that were predicted. I did favor sure gains rather than risky gains. But I did not want to take any risks I knew would cause me to lose money. I would rather know what I am winning or losing instead of how much I could have lost. This study demonstrates how a person makes choices based solely on the amount of risked that are included. Module Question ● What is the relevance of the Wason Selection task and Risky Decisions for financial decisions? The Wason Selection task gave a better understanding of how we look to approve what our beliefs are instead of looking for the truth despite the risk that what we believe in is wrong. It is essential to identify when we are going to make financial choices. An example could be when we want to make an investment, we need to look at all the information possible that will be installed in the investment; we don’t want to just look up information about what we already know. We want to find other information other than what we believe in. Take an investment like getting a car; you know how much you want to spend when it comes to the maintenance of the vehicle; if you are to take out loans, how much would everything be included all of this stuff. The risky decision experiment displays how there are many different factors that can affect your way of thinking. 8

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