Considers that intuitive predictions follow a judgmental heuristic-representativeness. By this heuristic, people predict the outcome that appears most representative of the evidence. Consequently, intuitive predictions are insensitive to the reliability of the evidence or to the prior probability of the outcome, in violation of the logic of statistical prediction. The hypothesis that people predict by representativeness was supported in a series of studies with both naive and sophisticated university students. The ranking of outcomes by likelihood coincided with the ranking by (...) representativeness, and Ss erroneously predicted rare events and extreme values if these happened to be representative. The experience of unjustified confidence in predictions and the prevalence of fallacious intuitions concerning statistical regression are traced to the representativeness heuristic. (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)