Which statement is correct?

Question

BlackTom AI · Accepted Answer

To begin, let's lay out the question and the available choices so we can evaluate each option carefully.
Option 1: 'Framing effect describes tendency to do nothing when faced with making a decision.' The framing effect refers to how the presentation or wording of a problem influences choices, not specifically a tendency to do nothing. So this statement mischaracterizes the framing effect by suggesting inaction as the defining outcome, which is misleading.
Option 2: 'Status quo bias describes how decisions can be influenced by how a problem is stated.' This option confuses status quo bias with framing. Status quo bias is about preferring current conditions and resisting change, whereas framing is about the influence of presentation. The statement conflates two distinct concepts, making it incorrect.
Option 3: 'Utility approach is useful but many decisions do not maximize the probability of the best outcome.' This option acknowledges the value of the utility (or expected utility) framework in guiding decisions, while also recognizing a key nuance: real-world decisions are often constrained by imperfect information, trade-offs, risk, and cognitive limits, so decisions may not maximize the theoretical best outcome. This aligns with behavioral insights and normative theories that admit deviation from optimality due to uncertainty, biases, and bounded rationality.
Option 4: 'The finding of Wason's four-card problem experiment showed that most participants are able to apply the falsification principle.' In the classic Wason selection task, most participants fail to apply falsification principles effectively; they tend to choose cards that confirm the rule rather than test it. Therefore, this statement is inaccurate about the typical result.
Overall, by comparing each option against established concepts in decision theory and cognitive psychology, we can see that Option 3 accurately captures both the utility approach and its limitations in practice, while the other statements misstate or confuse core ideas.

Which statement is correct?

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