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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. What nineteenth-century British economist proposed the idea of a "hedonimeter"?

2. Who coined the term "denominator neglect"?

3. What psychologist conduted an experiment wherein he recruited fans of professional basketball and elicited judgments concerning the winner of the NBA playoffs?

4. In discussing vacations, the author presents the assertion that tourism is about what?

5. The author asserts that errors of prediction are inevitable for what reason?

Short Essay Questions

1. What is the endowment effect?

2. Why does Kahneman cite the book Expert Political Judgment: How Good Is It? Who wrote this book?

3. What evidence was presented by Ed Diener and his team when examining vacations?

4. What is hindsight bias?

5. How did Nassim Taleb define the term narrative fallacy in The Black Swan?

6. What two different meanings does the author attribute to the word utility in Chapter 35?

7. Wht is duration neglect?

8. What is flow?

9. What did Tversky and Kahneman conclude in their study of pain during medical procedures?

10. What is the initial gamble that Paul Samuelson famously asked a friend?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

What is the author's history with Amos Tversky? On what works did the two collaborate? What terms and concepts did these individuals develop? Cite examples from the text in your answer.

Essay Topic 2

Describe and discuss expected utility theory. Who introduced this theory? What does it state? How does it differ from prospect theory?

Essay Topic 3

What is prospect theory? What are the principles of prospect theory? How does the model of prospect theory differ from normative models?

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