Surprisingly rational: Probability theory plus noise explains biases in judgment

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Title: Surprisingly rational: Probability theory plus noise explains biases in judgment
Authors: Costello, Fintan
Watts, Paul
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Date: Jul-2014
Abstract: The systematic biases seen in people’s probability judgments are typically taken as evidence that people do not use the rules of probability theory when reasoning about probability but instead use heuristics, which sometimes yield reasonable judgments and sometimes yield systematic biases. This view has had a major impact in economics, law, medicine, and other fields; indeed, the idea that people cannot reason with probabilities has become a truism. We present a simple alternative to this view, where people reason about probability according to probability theory but are subject to random variation or noise in the reasoning process. In this account the effect of noise is canceled for some probabilistic expressions. Analyzing data from 2 experiments, we find that, for these expressions, people’s probability judgments are strikingly close to those required by probability theory. For other expressions, this account produces systematic deviations in probability estimates. These deviations explain 4 reliable biases in human probabilistic reasoning (conservatism, subadditivity, conjunction, and disjunction fallacies). These results suggest that people’s probability judgments embody the rules of probability theory and that biases in those judgments are due to the effects of random noise
Type of material: Journal Article
Publisher: American Psychological Association
Journal: Psychological Review
Volume: 121
Issue: 3
Start page: 463
End page: 480
Copyright (published version): 2014 American Psychological Association
Keywords: ProbabilityRationalityRandom variationHeuristicsBiases
DOI: 10.1037/a0037010
Language: en
Status of Item: Peer reviewed
Appears in Collections:Computer Science Research Collection

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