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ABSTRACT Decision makers intending to avoid risk in a decision situation can choose a less risky alternative (passive risk avoidance) or intervene actively in an alternative applying a risk-defusing action (active risk avoidance). In Experiment 1 (64 participants), we compared active and passive risk defusing in two framing conditions. In the negative frame, in the uncertain alternative, a change to the worse was possible; in the positive frame, a change to an improvement was possible. Each participant decided in both framing conditions. As expected, active risk avoidance behavior for preventing a negative outcome (i.e., in the negative frame) was more likely than for promoting a positive one (i.e., in the positive frame). If decision makers did not or could not actively defuse the risk, they chose in correspondence to the classical pattern: risk avoidance in the positive frame and risk seeking in the negative one. We replicated the latter result in a second experiment (32 participants). The classical framing pattern in passive risk avoidance in both experiments is remarkable, because participants were not presented or did not search for exact probabilities. Copyright © 2014 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR] more...

This study examined the process of combining conclusive and inconclusive information using a Naval threat assessment simulation. On each of 36 trials, participants interrogated 10 pieces of information (e.g., speed, direction, bearing, etc.) about 'targets' in a simulated radar space. The number of hostile, peaceful, and inconclusive cues was factorially varied across targets. Three models were developed to understand how inconclusive information is used in the judgment of threat. According to one model, inconclusive information is ignored and the judgment of threat is based only on the conclusive information. According to a second model, the amount of dominant conclusive information is normalized by all of the available information. Finally, according to a third model, inconclusive information is partitioned under the assumption that it equally represents both dominant and non-dominant evidence. In Experiment 1, the data of novices (i.e., civilians) were best described by a model that assumes a partitioning of inconclusive evidence. This result was replicated in a second experiment involving variation of the global threat context. In a third experiment involving experts (i.e., Canadian Navy officers), the data of half of the participants were best described by the partitioning model and the data of the other half were best described by the normalizing model. In Experiments 1 and 2, the presence of inconclusive information produced a 'dilution effect', whereby hostile (peaceful) targets were judged as less hostile (peaceful) than the predictions of the Partitioning model. The dilution effect was not evident in the judgments of the Navy officers. Copyright © 2009 Crown in the right of Canada. Published by John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR] more...

The literature presents two major theories on the cause of the conjunction fallacy. The first attributes the conjunction fallacy to the representativeness heuristic. The second suggests that the conjunction fallacy is caused by people combining p(A) and p(B) into p(A&B) in an inappropriate manner. These two theories were contrasted in two category-learning experiments. As predicted by the latter theory, data showed that participants that could assess p(A&B) directly made fewer conjunction fallacies than participants who had to compute p(A) and p(B) separately and then combine them into p(A&B). Least conjunction fallacies were observed in the cases where the representativeness heuristic was applicable. Overall, data showed that an inability to appropriately combine probabilities is one of the key cognitive mechanisms behind the conjunction fallacy. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR] more...

An experiment is reported in which participants rendered judgments regarding the disease states of hypothetical patients. Participants either reported likelihoods that patients had the target disease (no choice), or classified patients into disease categories and then reported likelihoods that their classifications were correct (choice included). Also, participants' likelihood judgments were made in response to either a probability probe question, or a relative frequency probe. Two distinct exemplar-memory models were compared on their ability to predict overconfidence under these procedures. Both propose that people learn and judge by storing and retrieving examples. The exemplar retrieval model (ERM) proposes that amount of retrieval drives choice inclusion and likelihood probe effects. The alternative model assumes that response error mediates choice inclusion effects. Choice inclusion and the relative frequency probe reduced overconfidence, but the combined effects were subadditive. Only the ERM predicted this pattern, and it further provided good quantitative fits to these results. Copyright © 2003 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR] more...

A standard method for assessing whether people have appropriate internal representations of an event's likelihood is to check whether their subjective probability or frequency estimates for the event correspond with the assumed objective value for that event. When a person's estimate for the event exceeds its assumed objective probability or frequency, the person's expectancy for the event is concluded to be greater than warranted. This paper describes three lines of reasoning as to why conclusions of this sort can be problematic. Recently published findings as well as data from two new experiments are described to support this main thesis. The case of smoking risk is used to illustrate the more general problem, and issues that must be considered to avoid or contend with the problem are discussed. [ABSTRACT FROM AUTHOR] more...

Research has shown that the judged probability of an event depends on the specificity with which the focal and alternative hypotheses are described. In particular, unpacking the components of the focal hypothesis generally increases the judged probability of the focal hypothesis, while unpacking the components of the alternative hypothesis decreases the judged probability of the focal hypothesis. As a consequence, the Judged probability of the union of disjoint events is generally less than the sum of their judged probabilities. This article shows that the total judged probability of a set of mutually exclusive and exhaustive hypotheses increases with the degree to which the evidence is compatible with these hypotheses. This phenomenon, which we refer to as the enhancement effect, is consistent with a descriptive account of subjective probability called support theory. [ABSTRACT FROM AUTHOR] more...

This paper concerns the evaluation and combination of subjective probability estimates for categorical events. We argue that the appropriate criterion for evaluating individual and combined estimates depends on the type of uncertainty the decision maker seeks to represent, which in turn depends on his or her model of the event space. Decision makers require accurate estimates in the presence of aleatory uncertainty about exchangeable events, diagnostic estimates given epistemic uncertainty about unique events, and some combination of the two when the events are not necessarily unique, but the best equivalence class definition for exchangeable events is not apparent. Following a brief review of the mathematical and empirical literature on combining judgments, we present an approach to the topic that derives from (1) a weak cognitive model of the individual that assumes subjective estimates are a function of underlying judgment perturbed by random error and (2) a classification of judgment contexts in terms of the underlying information structure. In support of our developments, we present new analyses of two sets of subjective probability estimates, one of exchangeable and the other of unique events. As predicted, mean estimates were more accurate than the individual values in the first case and more diagnostic in the second. [ABSTRACT FROM AUTHOR] more...

We report three experiments comparing confidence judgments made by actors and by observers. In Experiment 1, actors generated qualitative answers (countries of the world) in a country-identification task: in Experiment 2, actors generated quantitative answers (years) in a historical event-dating task. Both actors and observers indicated their confidence in the actors' answers. Actors were significantly less confident in their answers than were observers in the first experiment. This effect was substantially reduced in the second experiment, whether confidence was measured by judged probability or by credible interval width. Experiment 3 used a control task in which actors attempted to bring an outcome variable into a desired range. In contrast to the first two experiments, actors in the control task were more confident than observers. Because subjects were generally overconfident in all three experiments, the present results demonstrate that the use of observers can reduce or exacerbate overconfidence depending on the kind of task and the nature of the event or possibility under evaluation. [ABSTRACT FROM AUTHOR] more...

We report results of an experiment designed to test a principle formulated by Budescu and Wallsten (1993), that, when communicating uncertainty information, mode choices are sensitive to sources and degrees of vagueness. In addition, we examined subjects' efficacy in using such uncertainty information as a function of communication mode, source, and vagueness. In phase one of the experiment, subjects in a dyad used precise (numerical) or imprecise (verbal) expressions to communicate to a remote partner precise or vague uncertainty about the likelihoods of events. Spinner outcomes were used to generate precise uncertainly while answers to almanac questions were used to elicit vague uncertainty. In phase two, subjects saw the events paired with their partners" estimates of similar events, and were asked to gamble on one event from each pair. Communication mode preferences were measured as the relative frequency that subjects chose the numerical mode to either express or receive uncertainty information regarding the events. Efficacy was measured as the relative frequency that subjects choose from the pair the event associated with the objectively more probable uncertainty expression. Underlying uncertainty interacted with direction of communication to affect preferences for modes of expression of the probabilities. Subjects preferred precise (numerical) information, especially for precise events (spinners). For vague events (questions), their preference for precise (numerical) information was stronger when receiving than when communicating information. Similar preferences were reflected in the efficiency of subsequent gamble decisions based on the probability estimates. Specifically, decisions were more efficacious (i.e. consistent with Expected Utility) when degrees of precision in events and estimates matched. [ABSTRACT FROM AUTHOR] more...

Conjunction errors in probability judgments have been explained in terms of representativeness, non-normative combination procedures, and linguistic, conversational, or conceptual misunderstandings. In two studies, a three-event variant of the classical Linda scenario (Tversky and Kahneman, 1983) was contrasted with estimates of Norway's chances in three coming World Cup soccer matches. Conjunction errors occurred even in the latter, real-life prediction task, but much less frequently than in the fictional Linda case. Magnitude of the conjunction effect was found to be dependent upon type of probability (fictional versus dispositional), unequal versus equal probabilities of constituent events, predictions of positive versus negative outcomes, and, for real-life predictions only, number of constituent events. Fictional probability ratings were close to but lower than representativeness ratings, giving evidence for a representativeness and adjustment-for-uncertainty strategy, whereas probabilities of real-life events were given a causal model interpretation. [ABSTRACT FROM AUTHOR] more...

Despite the importance of probability assessment methods in behavioral decision theory and decision analysis, little attention has been directed at evaluating their reliability and validity. In fact, no comprehensive study of reliability has been undertaken. Since reliability is a necessary condition for validity, this oversight is significant. The present study was motivated by that oversight. We investigated the reliability of probability measures derived from three response modes; numerical probabilities, pie diagrams, and odds. Unlike previous studies, the experiment was designed to distinguish systematic deviations in probability judgments, such as those due to experience or practice, from random deviations. It was found that subjects assessed probabilities reliably for all three assessment methods regardless of the reliability measures employed. However, a small but statistically significant decrease over time in the magnitudes of assessed probabilities was observed. This effect was linked to a decrease in subjects' overconfidence during the course of the experiment. [ABSTRACT FROM AUTHOR] more...

Judgments of evidence strength were obtained in a series of vignettes, each containing one or two items of evidence for each of two logically independent hypotheses. Each Judgment concerned a designated subset of the presented evidence. Different groups of subjects encountered different but overlapping sets of evidence. We compared groups that judged the same designated evidence for the same hypothesis, but differed in exposure to surrounding (nondesignated) evidence. Results showed clear separation of relevant from irrelevant evidence and of designated from surrounding relevant evidence. This was particularly clear in the second experiment, where judgments of designated evidence remained invariant whether the surrounding evidence supported or contradicted the specified hypothesis. The conjunction fallacy was observed for judgments of evidence strength, but was substantially reduced by a simple instruction. Because subjects can separate evidence, it becomes possible to construct cardinally scaled standards of evidence strength using conjoint-measurement methods. [ABSTRACT FROM AUTHOR] more...

The credible intervals that people set around their point estimates are typically too narrow (cf. Lichtenstein, Fischhoff, & Phillips, 1982). That is, a set of many such intervals does not contain the actual values of the criterion variables as often as it should given the probability assigned to this event for each estimate. The typical interpretation of such data is that people are overconfident about the accuracy of their judgments. This paper presents data from two studies showing the typical levels of overconfidence for individual estimates of unknown quantities. However, data from the same subjects on a different measure of confidence for the same items, their own global assessment for the set of multiple estimates as a whole, showed significantly lower levels of confidence and overconfidence than their average individual assessment for items in the set. It is argued that the event and global assessments of judgment quality are fundamentally different and are affected by unique psychological processes. Finally, we discuss the implications of a difference between confidence in single and multiple estimates for confidence research and theory. [ABSTRACT FROM AUTHOR] more...

This article presents a critique of the concept of randomness as it occurs in the psychological literature. The first section of our article outlines the significance of a concept of randomness to the process of induction; we need to distinguish random and non-random events in order to perceive lawful regularities and formulate theories concerning events in the world. Next we evaluate the psychological research that has suggested that human concepts of randomness are not normative. We argue that, because the tasks set to experimental subjects are logically problematic, observed biases may be an artifact of the experimental situation and that even if such biases do generalise they may not have pejorative implications for induction in the real world. Thirdly we investigate the statistical methodology utilised in tests for randomness and find it riddled with paradox. In a fourth section we find various branches of scientific endeavour that are stymied by the problems posed by randomness. Finally we briefly mention the social significance of randomness and conclude by arguing that such a fundamental concept merits and requires more serious considerations. [ABSTRACT FROM AUTHOR] more...