Heuristics and Biases in Decision Making Quiz

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Questions and Answers

What determines the accessibility of an attribute in the context of attribute substitution?

Specificity

Representativeness

Concreteness

Availability (correct)

According to T&K (1974), when do heuristics lead to severe and systematic errors?

When they are effortful (correct)

When they are automatic

When they are abstract

When they are useful

In the Linda problem, attribute substitution involves replacing a hard question with:

A harder question

An easier question (correct)

An unrelated question

A similar question

Which factor refers to the degree to which one thing resembles another in the context of accessibility?

Representativeness Signup and view all the answers

What is the main attribute of an accessible attribute?

Concrete Signup and view all the answers

Which type of attribute involves specific characteristics rather than abstract ones in accessibility?

'Harder' attributes Signup and view all the answers

What are the two benchmarks mentioned in the text for decision making?

Coherence and correspondence Signup and view all the answers

Who proposed the method known as Bayes' Theorem?

Rev. Thomas Bayes Signup and view all the answers

In the example with bags and poker chips, what was the correct answer to the question about drawing chips from the 'mostly red' bag?

97% Signup and view all the answers

What common cognitive bias is mentioned in relation to people underestimating probabilities in a scenario like the one described with poker chips?

Conservatism bias Signup and view all the answers

Who found that most people underestimate probabilities, leading to not extracting enough information as required by Bayes’s Theorem?

Edwards Signup and view all the answers

Which individual is associated with the question 'Which is more probable? Mr F. has had one or more heart attacks or Mr F.'?

Daniel Kahneman Signup and view all the answers

What does the conjunction rule state regarding probability?

Probability of A is always greater than the probability of A & B Signup and view all the answers

Why should judgments and decisions be internally consistent?

To adhere to axioms of probability theory Signup and view all the answers

Which error is mentioned in the text?

Endorsing contradictory principles Signup and view all the answers

What is the primary focus of correspondence in judgments?

Validating cues in the environment Signup and view all the answers

In the example given, what is more likely according to the text?

A man commits suicide Signup and view all the answers

What do heuristics or biases refer to in decision-making?

Systematic deviations from normative principles Signup and view all the answers

What analogy is used to describe heuristics in the text?

Rorschach ink blots Signup and view all the answers

What is the Transitivity Coherence Criterion?

Preferring A over B, B over C, and C over A Signup and view all the answers

In the scenario with Barry's preferences, what term is used to describe his inconsistent choices?

Intransitive preferences Signup and view all the answers

What should Barry be willing to do according to his inconsistent preferences?

Pay to switch Cola with Orange Signup and view all the answers

How much money does Barry end up spending in the scenario described in the text?

$30 Signup and view all the answers

Based on the scenario, is there any evidence for money pumps?

Yes, because Barry's inconsistent preferences lead him to spend money unnecessarily. Signup and view all the answers

According to Arkes et al., what does the ecological-rationality research strategy measure?

Success in the world Signup and view all the answers

What does the ecological rationality of strategies depend on, according to the stages of an Ecologically Rational Research Program by Arkes et al.?

Match between cognitive strategy and environment structure Signup and view all the answers

In terms of predation, what does Houston et al. suggest about the optimal strategy as reserves increase?

Taking fewer risks Signup and view all the answers

What are the stages in an Ecologically Rational Research Program by Arkes et al. for determining ecological rationality of strategies?

Identify goal, strategies, environmental properties, determine ecological rationality Signup and view all the answers

According to Lopes (1996), what did he refer to as 'logical bogeymen' in the literature review conducted by Arkes et al.?

Person becoming money pump Signup and view all the answers

How does the ecological-rationality research strategy define success?

Making competitive decisions and accurate predictions Signup and view all the answers

Study Notes

Conjunction Rule

The probability of a conjunction (p(heart attack & over 55)) cannot be more probable than one of its conjuncts (p(heart attack)).
P(Heart attack) ≥ P(Heart attack & over 55)

Coherence Judgments

Coherence judgments should be internally consistent with appropriate principles.
Examples of principles include axioms of probability theory and axioms of expected utility theory.
It is irrational to endorse principles that contradict one another.

Correspondence

Correspondence refers to how well people's judgments correspond with the actual state of the world.
Judgments are derived from facts or cues in the environment.
The validity of cues is determined by how they relate to outcomes of interest.

Heuristics or Biases?

Heuristics and biases are informal models of decision-making.
Introspection and reflection can be used to evaluate what makes decisions good or bad, or easy or hard.
Two benchmarks for evaluating decision-making are coherence and correspondence.

Bayes' Theorem

Bayes' Theorem is a method for working out what you don't know from what you do know.
It updates your belief in a hypothesis (H) on the basis of data (D) that you have.
p(H/D) = p(D/H) * p(H) / (p(D/H) * p(H) + p(D/not H) * p(not H))

Bayes' Theorem Example

Imagine two bags filled with millions of poker chips, one with 70% red and 30% blue, and the other with 70% blue and 30% red.
Suppose a dozen chips are drawn from a randomly chosen bag, with 8 red chips and 4 blue chips.
The correct answer is that the probability of the chips being drawn from the bag with mostly red chips is 97%.

Conservatism

Conservatism refers to the tendency to not extract as much information from the sample as required by Bayes' Theorem.
Edwards (1968) found that most people underestimated the probability.

Attribute Substitution

Attribute substitution occurs when people answer a hard question with an easier answer.
The target attribute is substituted by a more accessible one.
What determines accessibility is representativeness (the degree to which one thing resembles another) and availability (the ease with which examples come to mind).

The Linda Problem

The Linda problem is an example of attribute substitution.
Linda is 31 years old, single, outspoken, and very bright, and was deeply concerned with issues of discrimination and social justice.
Seven statements are given, and participants are asked to rank them in order of probability or similarity.

Heuristics as Explanations

One-word descriptions provide no information about the process.
The heuristics explanations are circular and can be read into as desired.
Gigerenzer (1996) criticized the work of Kahneman and Tversky.

Transitivity of Choice

Transitivity of choice is a coherence criterion.
If a rational decision maker prefers Alternative B to Alternative A, and Alternative C to Alternative B, then they should prefer Alternative C to Alternative A.
The money pump scenario is a hypothetical example of intransitivity, where a person is willing to pay something to trade a less preferred alternative, but ends up back where they started and out of pocket.

Ecological Rationality

Ecological rationality measures rationality in terms of success in the world, such as making competitive decisions and accurate predictions.
It does not equate rationality with following a coherence rule, but by the "match" between a cognitive strategy and the structure of the environment.
The ecological-rationality research strategy involves identifying the goal of an individual or group, identifying the set of strategies available to reach that goal, identifying the structural properties of the environment, and determining the ecological rationality of the strategies in the environment.

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Description

Test your knowledge on heuristics and biases in decision making with this quiz. Explore concepts such as attribute substitution, analogies with visual illusions, and the automatic and rapid nature of decision-making processes. The quiz delves into the research of Tversky and Kahneman (1974) and their emphasis on how heuristics can sometimes lead to systematic errors.