Conviction Narrative Theory (CNT) is a theory of choice underradical uncertainty– situations where outcomes cannot be enumerated and probabilities cannot be assigned. Whereas most theories of choice assume that people rely on (potentially biased) probabilistic judgments, such theories cannot account for adaptive decision-making when probabilities cannot be assigned. CNT proposes that people usenarratives– structured representations of causal, temporal, analogical, and valence relationships – rather than probabilities, as the currency of thought that unifies our sense-making and decision-making faculties. According to CNT, (...) narratives arise from the interplay between individual cognition and the social environment, with reasoners adopting a narrative that feels “right” to explain the available data; using that narrative to imagine plausible futures; and affectively evaluating those imagined futures to make a choice. Evidence from many areas of the cognitive, behavioral, and social sciences supports this basic model, including lab experiments, interview studies, and econometric analyses. We identify 12 propositions to explain how the mental representations (narratives) interact with four inter-related processes (explanation, simulation, affective evaluation, and communication), examining the theoretical and empirical basis for each. We conclude by discussing how CNT can provide a common vocabulary for researchers studying everyday choices across areas of the decision sciences. (shrink)

Five experiments investigated how people use categories to make inductions about objects whose categorisation is uncertain. Normatively, they should consider all the categories the object might be in and use a weighted combination of information from all the categories: bet-hedging. The experiments presented people with simple, artificial categories and asked them to make an induction about a new object that was most likely in one category but possibly in another. The results showed that the majority of people focused on the (...) most likely category in making inductions, although there was a group of consistently normative responders who used information from both categories (about 25% of our college population). Across experiments the overall pattern of results suggests that performance in the task is improved not by understanding the underlying principles of bet-hedging but by increasing the likelihood that multiple categories are in working memory at the time of the induction. We discuss implications for improving everyday inductions. (shrink)