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A model of cue-based probability judgment is developed within the framework of support theory. Cue diagnosticity is evaluated from experience as represented by error-free frequency counts. When presented with a pattern of cues, the diagnostic implications of each cue are assessed independently and then summed to arrive at an assessment of the support for a hypothesis, with greater weight placed on present than on absent cues. The model can also accommodate adjustment of support in light of the baserate or prior probability of a hypothesis. Support for alternatives packed together in a "residual" hypothesis is discounted; fewer cues are consulted in assessing support for alternatives as support for the focal hypothesis increases. Results of fitting this and several alternative models to data from four new multiple-cue probability learning experiments are reported.

Does taxing cognitive resources improve people's choices in repeated binary prediction? Wolford, Newman, Miller, and Wig (2004, Canadian Journal of Experimental Psychology, 58, 221–228) found that a secondary verbal working memory task, which competed for cognitive resources with a repeated binary choice task, steered participants toward adopting the optimal strategy, namely, probability maximizing. By contrast, under single-task conditions, an inferior strategy prevailed, namely, probability matching. We conducted a preregistered direct replication of Experiment 1 in Wolford et al. (2004) with a sample of participants more than 5 times larger than the original sample. We did not find a statistically significant effect of cognitive load on strategy selection in repeated binary choice. Moreover, in many cases, Bayesian analyses, which were performed in addition to conventional methods of null hypothesis significance testing, yielded substantial evidence in favor of the absence of cognitive load effects on choice behavior. Thus, we found no reliable support for the claim that taxing cognitive resources leads to improved decision-making in repeated binary prediction. [ABSTRACT FROM AUTHOR]

We integrate a case-based model of probability judgment with prospect theory to explore asset pricing under uncertainty. Research within the "heuristics and biases" tradition suggests that probability judgments respond primarily to case-specific evidence and disregard aggregate characteristics of the class to which the case belongs, resulting in predictable biases. The dual-system framework presented here distinguishes heuristic assessments of value and evidence strength from deliberative assessments that incorporate prior odds and likelihood ratios following Bayes' rule. Hypotheses are derived regarding the relative sensitivity of judged probabilities, buying prices, and selling prices to case- versus class-based evidence. We test these hypotheses using a simulated stock market in which participants can learn from experience and have incentives for accuracy.Valuation of uncertain assets is found to be largely case based even in this economic setting; however, consistent with the framework's predictions, distinct patterns of miscalibration are found for buying prices, selling prices,and probability judgments. [ABSTRACT FROM AUTHOR]

Findings from two experiments indicate that probability matching in sequential choice arises from an asymmetry in strategy availability: The matching strategy comes readily to mind, whereas a superior alternative strategy, maximizing, does not. First, compared with the minority who spontaneously engage in maximizing, the majority of participants endorse maximizing as superior to matching in a direct comparison when both strategies are described. Second, when the maximizing strategy is brought to their attention, more participants subsequently engage in maximizing. Third, matchers are more likely than maximizers to base decisions in other tasks on their initial intuitions, suggesting that they are more inclined to use a choice strategy that comes to mind quickly. These results indicate that a substantial subset of probability marchers are victims of"underthinking" rather than "overthinking": They fail to engage in sufficient deliberation to generate a superior alternative to the matching strategy that comes so readily to mind. [ABSTRACT FROM AUTHOR]

Abstract: Gaissmaier and Schooler (2008) [Gaissmaier, W., & Schooler, L. J. (2008). The smart potential behind probability matching. Cognition, 109, 416–422] argue that probability matching, which has traditionally been viewed as a decision making error, may instead reflect an adaptive response to environments in which outcomes potentially follow predictable patterns. In choices involving monetary stakes, we find that probability matching persists even when it is not possible to identify or exploit outcome patterns and that many “probability matchers” rate an alternative strategy (maximizing) as superior when it is described to them. Probability matching appears to reflect a mistaken intuition that can be, but often is not, overridden by deliberate consideration of alternative choice strategies. [Copyright &y& Elsevier]

Choice strategies for selecting among outcomes in multiple-cue probability learning were investigated using a simulated medical diagnosis task. Expected choice probabilities (the proportion of times each outcome was selected given each cue pattern) under alternative choice strategies were constructed from corresponding observed judged probabilities (of each outcome given each cue pattern) and compared with observed choice probabilities. Most of the participants were inferred to have responded by using a deterministic strategy, in which the outcome with the higher judged probability is consistently chosen, rather than a probabilistic strategy, in which an outcome is chosen with a probability equal to its judged probability. Extended practice in the learning environment did not affect choice strategy selection, contrary to reports from previous studies, results of which may instead be attributable to changes with practice in the variability and extremity of the perceived probabilities on which the choices were based. [ABSTRACT FROM AUTHOR]

Previous research has shown that probabifity judgments based on a mix of diagnostic and nondiagnostic information are less extreme than judgments based on the diagnostic information alone. Results of the present experiments suggest that this dilution effect holds only under a limited set of conditions. When judgments based on a mix of diagnostic and nondiagnostic information are compared with separately elicited judgments based on the diagnostic information alone, the dilution effect is consistently observed. When judgments based on the diagnostic evidence are revised in light of additional, nondiagnostic evidence, by contrast, the dilution effect is eliminated or even reversed (yielding a confirmation effect) depending on the type of nondiagnostic evidence under evaluation. [ABSTRACT FROM AUTHOR]

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]

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]

The distinction between intuitive and analytic thinking is common in psychology. However, while often being quite clear on the characteristics of the two processes (‘Type 1’ processes are fast, autonomous, intuitive, etc. and ‘Type 2’ processes are slow, deliberative, analytic, etc.), dual-process theorists have been heavily criticized for being unclear on the factors that determine when an individual will think analytically or rely on their intuition. We address this issue by introducing a three-stage model that elucidates the bottom-up factors that cause individuals to engage Type 2 processing. According to the model, multiple Type 1 processes may be cued by a stimulus (Stage 1), leading to the potential for conflict detection (Stage 2). If successful, conflict detection leads to Type 2 processing (Stage 3), which may take the form of rationalization (i.e., the Type 1 output is verified post hoc ) or decoupling (i.e., the Type 1 output is falsified). We tested key aspects of the model using a novel base-rate task where stereotypes and base-rate probabilities cued the same (non-conflict problems) or different (conflict problems) responses about group membership. Our results support two key predictions derived from the model: (1) conflict detection and decoupling are dissociable sources of Type 2 processing and (2) conflict detection sometimes fails. We argue that considering the potential stages of reasoning allows us to distinguish early (conflict detection) and late (decoupling) sources of analytic thought. Errors may occur at both stages and, as a consequence, bias arises from both conflict monitoring and decoupling failures. [ABSTRACT FROM AUTHOR]

Abstract: Recent evidence suggests that people are highly efficient at detecting conflicting outputs produced by competing intuitive and analytic reasoning processes. Specifically, demonstrated that participants reason longer about problems that are characterized by conflict (as opposed to agreement) between stereotypical personality descriptions and base-rate probabilities of group membership. However, this finding comes from problems involving probabilities much more extreme than those used in traditional studies of base-rate neglect. To test the degree to which these findings depend on such extreme probabilities, we varied base-rate probabilities over five experiments and compared participants’ response time for conflict problems with non-conflict problems. Longer response times for stereotypical responses to conflict versus non-conflict problems were found only in the presence of extreme probabilities. Our results suggest that humans may not be consistently efficient at detecting conflicts during reasoning. [Copyright &y& Elsevier]