Behavioral Economics PreQuiz Results

As you probably guessed, this was not a test of your intelligence or even a test of your knowledge of economics. What this test is a little questionnaire to show us all how our brain makes systematic mistakes. After a review of your answers, some of you got some of them right (either because you stopped and used the laborious and slow rational part of your brain rather than the automatic part, or because you had heard the questions before ;-) ). But what I found is that no one got all of them right. Don’t worry, I didn’t either when I first took this test. What follows is a little discussion about each of the sets of questions and what concept they are introducing. I also attached a spreadsheet with student answers and a little analysis.

Questions 2, 3 and 4 

  1. Please write down the last four digits of your mobile number:
  1. Is the number of physicians in Dublin higher or lower than this number?
  1. What is your best guess as to the number of physicians in Dublin?

Discussion

Question 5: A bat and a ball together cost $1.10.  The bat costs $1.00 more than the ball. How much does the ball cost?

Discussion


Question 6: Do you expect to perform above or below average in this course?

Discussion

Question 7: Imagine  these are four playing cards laid out in front of you, each of which has a number on one side and a letter on the other. The visible faces of the cards show E, 4, K and 7. Which card(s) should you turn over in order to test the truth of the proposition that if a card shows an E, then its opposite face is 4?

 


Discussion


Question 8: Suppose an unbiased coin is flipped three times, and each time the coin lands on heads. If you had to bet $1,000 on the next toss, what side would you choose? Heads, tails or no preference?

Discussion

Question 9 :If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?

See Question 5 above.

Question 10: Imagine that Ireland is preparing for the outbreak of an unusual disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume the exact scientific estimates of the consequences of the programs are as follows:

If program A is adopted 200 people will be saved.

If program B is adopted there is a 1/3/ probability that 600 people will be saved, and a 2/3 probability that no one will be saved.

 Which program do you choose?

Discussion

Question 11: You are offered the following bet: on the toss of a fair coin, if you lose you must pay $100. What is the minimum amount that you need to win in order to make this bet attractive to you?

Discussion

Question 12: In a lake, there is a patch of lily pads. Every day the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?

See question 5 discussion above.

Question 13: The same disease from question 10 is back. Only this time the two programs now have the following payoffs:

If program C is adopted 400 people will die.

If Program D is adopted there is a 1/3 probability that nobody will die, and a 2/3 probability that 600 will die.

 Which program do you support?

Discussion: See question 10 above.

Question 14: You are on a game show. You are offered a choice of one of three doors. Behind two of the doors there is a goat. Behind one of the doors there is a car. Upon your announcing which door you choose, the host of the show opens one of the two doors not selected by you, and reveals a goat. After he has done this, he offers you the opportunity to switch your choice. What should you do, stick or switch?

Discussion

Question 15: You are now going to play a game against others sitting in this room.  The game is simply this.  Pick a number between 0 and 100.  The winner of the game will be the person who guesses the number closest to two thirds of the average number picked.  Your guess is:

Discussion