Is our case strong enough to go to trial? Will interest rates go up? Can I trust this person? Such questions - and the judgments required to answer them - are woven into the fabric of everyday experience. This book, first published in 2002, examines how people make such judgments. The study of human judgment was transformed in the 1970s, when Kahneman and Tversky introduced their 'heuristics and biases' approach and challenged the dominance of strictly rational models. Their work highlighted (...) the reflexive mental operations used to make complex problems manageable and illuminated how the same processes can lead to both accurate and dangerously flawed judgments. The heuristics and biases framework generated a torrent of influential research in psychology - research that reverberated widely and affected scholarship in economics, law, medicine, management, and political science. This book compiles the most influential research in the heuristics and biases tradition since the initial collection of 1982. (shrink)

The first section introduces a distinction between 2 families of cognitive operations, called System 1 and System 2. The second section presents an attribute-substitution model of heuristic judgment, which elaborates and extends earlier treatments of the topic. The third section introduces a research design for studying attribute substitution. The fourth section discusses the controversy over the representativeness heuristic. The last section situates representativeness within a broad family of prototype heuristics, in which properties of a prototypical exemplar dominate global judgments concerning (...) an entire set. (shrink)

The law of gravitation, an example of physical law The relation of mathematics to physics The great conservation principles Symmetry in physical law The distinction of past and future Probability and uncertainty: the quantum mechanical view of nature Seeking new laws.

We have been oversold on the base rate fallacy in probabilistic judgment from an empirical, normative, and methodological standpoint. At the empirical level, a thorough examination of the base rate literature (including the famous lawyer–engineer problem) does not support the conventional wisdom that people routinely ignore base rates. Quite the contrary, the literature shows that base rates are almost always used and that their degree of use depends on task structure and representation. Specifically, base rates play a relatively larger role (...) in tasks where base rates are implicitly learned or can be represented in frequentist terms. Base rates are also used more when they are reliable and relatively more diagnostic than available individuating information. At the normative level, the base rate fallacy should be rejected because few tasks map unambiguously into the narrow framework that is held up as the standard of good decision making. Mechanical applications of Bayes's theorem to identify performance errors are inappropriate when (1) key assumptions of the model are either unchecked or grossly violated, and (2) no attempt is made to identify the decision maker's goals, values, and task assumptions. Methodologically, the current approach is criticized for its failure to consider how the ambiguous, unreliable, and unstable base rates of the real world are and should be used. Where decision makers' assumptions and goals vary, and where performance criteria are complex, the traditional Bayesian standard is insufficient. Even where predictive accuracy is the goal in commonly defined problems, there may be situations (e.g., informationally redundant environments) in which base rates can be ignored with impunity. A more ecologically valid research program is called for. This program should emphasize the development of prescriptive theory in rich, realistic decision environments. (shrink)

The Empire of Chance tells how quantitative ideas of chance transformed the natural and social sciences, as well as daily life over the last three centuries. A continuous narrative connects the earliest application of probability and statistics in gambling and insurance to the most recent forays into law, medicine, polling and baseball. Separate chapters explore the theoretical and methodological impact in biology, physics and psychology. Themes recur - determinism, inference, causality, free will, evidence, the shifting meaning of probability - but (...) in dramatically different disciplinary and historical contexts. In contrast to the literature on the mathematical development of probability and statistics, this book centres on how these technical innovations remade our conceptions of nature, mind and society. Written by an interdisciplinary team of historians and philosophers, this readable, lucid account keeps technical material to an absolute minimum. It is aimed not only at specialists in the history and philosophy of science, but also at the general reader and scholars in other disciplines. (shrink)

This article outlines a theory of naive probability. According to the theory, individuals who are unfamiliar with the probability calculus can infer the probabilities of events in an extensional way: They construct mental models of what is true in the various possibilities. Each model represents an equiprobable alternative unless individuals have beliefs to the contrary, in which case some models will have higher probabilities than others. The probability of an event depends on the proportion of models in which it occurs. (...) The theory predicts several phenomena of reasoning about absolute probabilities, including typical biases. It correctly predicts certain cognitive illusions in inferences about relative probabilities. It accommodates reasoning based on numerical premises, and it explains how naive reasoners can infer posterior probabilities without relying on Bayes's theorem. Finally, it dispels some common misconceptions of probabilistic reasoning. (shrink)