Behavioral Decision Studies
I
Eduard Brandstätter,
René Riedl,
Eduard Brandstätter
Johannes Kepler University of Linz, Linz, Austria
Search for more papers by this authorEduard Brandstätter,
René Riedl,
Eduard Brandstätter
Johannes Kepler University of Linz, Linz, Austria
Search for more papers by this authorFirst published: 15 September 2008
Abstract
Probability judgments are pivotal in guiding human decision making. The prevailing assumption in psychology is that human probability judgments are often biased. We challenge this view and present evidence of humans' remarkable capacities in judging probabilities. In particular, we discuss regression to the mean, probability judgments of conjunctive and disjunctive events, the consideration of base-rate information, probability judgments based on small samples, judgments of personal risks, and external influences on probability judgments. We conclude that in real-life contexts, in which the correct normative solutions are usually unknown, heuristics are useful tools for making fast and frugal judgments and decisions.
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Encyclopedia of Quantitative Risk Analysis and Assessment
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