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186
Models of Ecological Rationality: The Recognition Heuristic.
- Psychological Review,
, 2002
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Error management theory: A new perspective on biases in cross-sex mind reading
- Journal of Personality and Social Psychology
, 2000
"... A new theory of cognitive biases, called error management theory (EMT), proposes that psychological mechanisms are designed to be predictably biased when the costs of false-positive and false-negative errors were asymmetrical over evolutionary history. This theory explains known phenomena such as me ..."
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Cited by 164 (26 self)
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A new theory of cognitive biases, called error management theory (EMT), proposes that psychological mechanisms are designed to be predictably biased when the costs of false-positive and false-negative errors were asymmetrical over evolutionary history. This theory explains known phenomena such as men's overperception of women's sexual intent, and it predicts new biases in social inference such as women's underestimation of men's commitment. In Study 1 (N = 217), the authors documented the commitment underperception effect predicted by EMT. In Study 2 (N = 289), the authors replicated the commitment bias and documented a condition in which men's sexual overperception bias is corrected. Discussion contrasts EMT with the heuristics and biases approach and suggests additional testable hypotheses based on EMT. Several independent traditions of research have documented systematic errors in human judgment and decision making. The most famous of these was established by Tversky and Kahneman, 1974) and is influential in cognitive and social psychology as well as in business and economics (Lopes, 1991). Social cognition researchers in this tradition have documented cognitive errors such
Homo Heuristicus: Why Biased Minds Make Better Inferences
, 2009
"... Heuristics are efficient cognitive processes that ignore information. In contrast to the widely held view that less processing reduces accuracy, the study of heuristics shows that less information, computation, and time can in fact improve accuracy. We review the major progress made so far: (a) the ..."
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Cited by 107 (12 self)
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Heuristics are efficient cognitive processes that ignore information. In contrast to the widely held view that less processing reduces accuracy, the study of heuristics shows that less information, computation, and time can in fact improve accuracy. We review the major progress made so far: (a) the discovery of less-is-more effects; (b) the study of the ecological rationality of heuristics, which examines in which environments a given strategy succeeds or fails, and why; (c) an advancement from vague labels to computational models of heuristics; (d) the development of a systematic theory of heuristics that identifies their building blocks and the evolved capacities they exploit, and views the cognitive system as relying on an ‘‘adaptive toolbox;’ ’ and (e) the development of an empirical methodology that accounts for individual differences, conducts competitive tests, and has provided evidence for people’s adaptive use of heuristics. Homo heuristicus has a biased mind and ignores part of the available information, yet a biased mind can handle uncertainty more efficiently and robustly than an unbiased mind relying on more resource-intensive and general-purpose processing strategies.
The ‘Conjunction Fallacy’ Revisited: How Intelligent Inferences Look Like Reasoning Errors
- Journal of Behavioral Decision Making
, 1999
"... Findings in recent research on the `conjunction fallacy ' have been taken as evidence that our minds are not designed to work by the rules of probability. This conclusion springs from the idea that norms should be content-blind Ð in the present case, the assumption that sound reasoning requires ..."
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Cited by 87 (16 self)
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Findings in recent research on the `conjunction fallacy ' have been taken as evidence that our minds are not designed to work by the rules of probability. This conclusion springs from the idea that norms should be content-blind Ð in the present case, the assumption that sound reasoning requires following the conjunction rule of probability theory. But content-blind norms overlook some of the intelligent ways in which humans deal with uncertainty, for instance, when drawing semantic and pragmatic inferences. In a series of studies, we ®rst show that people infer nonmathematical meanings of the polysemous term `probability' in the classic Linda conjunction problem. We then demonstrate that one can design contexts in which people infer mathematical meanings of the term and are therefore more likely to conform to the conjunction rule. Finally, we report evidence that the term `frequency ' narrows the spectrum of possible interpretations of `probability ' down to its mathematical meanings, and that this fact Ð rather than the presence or absence of `extensional cues ' Ð accounts for the low proportion of violations of the conjunction rule when people are asked for
Naive empiricism and dogmatism in confidence research: a critical examination of the hard-easy effect
- Psychol. Rev
, 2000
"... Two robust phenomena in research on confidence in one's general knowledge are the overconfidence phenomenon and the hard-easy effect. In this article, the authors propose that the hard-easy effect has been interpreted with insufficient attention to the scale-end effects, the linear dependency, ..."
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Cited by 63 (2 self)
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Two robust phenomena in research on confidence in one's general knowledge are the overconfidence phenomenon and the hard-easy effect. In this article, the authors propose that the hard-easy effect has been interpreted with insufficient attention to the scale-end effects, the linear dependency, and the regression effects in data and that the continued adherence to the idea of a "cognitive overconfidence bias " is mediated by selective attention to particular data sets. A quantitative review of studies with 2-alternative general knowledge items demonstrates that, contrary to widespread belief, there is (a) very little support for a cognitive-processing bias in these data; (b) a difference between representative and selected item samples that is not reducible to the difference in difficulty; and (c) near elimination of the hard-easy effect when there is control for scale-end effects and linear dependency. Two well-known threats to scientific progress are naive empir-icism and dogmatism. When one tries to explain to an untutored mind that the earth is round, one might be objected to by reference to the fact that the horizon looks flat to the naked eye. This is an illustration of naive empiricism, the uncritical acceptance of em-pirical observation. The classic example of dogmatism, theological
Experimental research in financial accounting
- Accounting, Organizations and Society
, 2002
"... This paper uses recent experimental studies of financial accounting to illustrate our view of how such experiments can be conducted successfully. Rather than provide an exhaustive review of the literature, we focus on how particular examples illustrate successful use of experiments to determine how, ..."
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Cited by 59 (0 self)
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This paper uses recent experimental studies of financial accounting to illustrate our view of how such experiments can be conducted successfully. Rather than provide an exhaustive review of the literature, we focus on how particular examples illustrate successful use of experiments to determine how, when and (ultimately) why important features of financial accounting settings influence behavior. We first describe how changes in views of market efficiency, reliance on the experimentalist’s comparative advantage, new theories, and a focus on key institutional features have allowed researchers to overcome the criticisms of earlier financial accounting experiments. We then describe how specific streams of experimental financial accounting research have addressed questions about financial communication between managers, auditors, information intermediaries, and investors, and indicate how future research can extend those streams. We focus particularly on (1) how managers and auditors report information; (2) how users of financial information interpret those reports; (3) how individual decisions affect market behavior; and (4) how strategic inter-actions between information reporters and users can affect market outcomes. Our examples include and integrate experiments that fall into both the ‘‘behavioral’ ’ and ‘‘experimental economics’ ’ literatures in accounting. Finally, we
The Uncertainty Effect: When a Risky Prospect if Values Less Than Its Worst Outcome
- Quarterly Journal of Economics
, 2006
"... Expected utility theory, prospect theory, and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences. These models, therefore, require that the value of a risky prospect lie between the ..."
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Cited by 55 (1 self)
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Expected utility theory, prospect theory, and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences. These models, therefore, require that the value of a risky prospect lie between the value of that prospect’s highest and lowest outcome. Although this requirement seems essential for any theory of risky decision-making, we document a violation of this condition in which individuals value a risky prospect less than its worst possible realization. This demonstration, which we term the uncertainty effect, draws from more than 1000 experimental participants, and includes hypothetical and real pricing and choice tasks, as well as field experiments in real markets with financial incentives. Our results suggest that there are choice situations in which decision-makers discount lotteries for uncertainty in a manner that cannot be accommodated by standard models of risky choice. From the time of Bernoulli on, it has been common to argue that (a) individuals tend to display aversion to the taking of risks, and (b) that risk aversion in turn is an explanation for many observed phenomena in the economic world [Arrow 1971, p. 90]. I.
Signal detection by human observers: A cutoff reinforcement learning model of categorization decisions under uncertainty
- Psychological review
, 1998
"... Previous experimental examinations of binary categorization decisions have documented robust behavioral regularities that cannot be predicted by signal detection theory (D. M. Green & J. A. Swets, 1966/1988). The present article reviews the known regularities and demonstrates that they can be ac ..."
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Cited by 54 (7 self)
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Previous experimental examinations of binary categorization decisions have documented robust behavioral regularities that cannot be predicted by signal detection theory (D. M. Green & J. A. Swets, 1966/1988). The present article reviews the known regularities and demonstrates that they can be accounted for by a minimal modification of signal detection theory: the replacement of the "ideal observer " cutoff placement rule with a cutoff reinforcement learning rule. This modification is derived from a cognitive game theoretic analysis (A. E. Roth & I. Erev, 1995). The modified model reproduces all 19 experimental regularities that have been considered. In all cases, it outperforms the original explanations. Some of these previous explanations are based on important concepts uch as conservatism, probability matching, and "the gambler's fallacy " that receive new meanings given the current results. Implications for decision-making research and for applications of traditional signal detection theory are discussed. Many common activities involve binary categorization deci-sions under uncertainty. While walking on campus, for example, students often try to distinguish between the individuals to whom they should say "hel lo " and the ones they had better ignore
Heuristics made easy: An effort-reduction framework
- Psychological Bulletin
, 2008
"... In this article, the authors propose a new framework for understanding and studying heuristics. The authors posit that heuristics primarily serve the purpose of reducing the effort associated with a task. As such, the authors propose that heuristics can be classified according to a small set of effo ..."
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Cited by 50 (1 self)
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In this article, the authors propose a new framework for understanding and studying heuristics. The authors posit that heuristics primarily serve the purpose of reducing the effort associated with a task. As such, the authors propose that heuristics can be classified according to a small set of effort-reduction principles. The authors use this framework to build upon current models of heuristics, examine existing heuristics in terms of effort-reduction, and outline how current research methods can be used to extend this effort-reduction framework. This framework reduces the redundancy in the field and helps to explicate the domain-general principles underlying heuristics.
Teaching Bayesian reasoning in less than two hours
- Journal of Experimental Psychology: General
, 2001
"... The authors present and test a new method of teaching Bayesian reasoning, something about which previous teaching studies reported little success. Based on G. Gigerenzer and U. Hoffrage's (1995) ecological framework, the authors wrote a computerized tutorial program to train people to construct ..."
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Cited by 48 (8 self)
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The authors present and test a new method of teaching Bayesian reasoning, something about which previous teaching studies reported little success. Based on G. Gigerenzer and U. Hoffrage's (1995) ecological framework, the authors wrote a computerized tutorial program to train people to construct frequency representations (representation training) rather than to insert probabilities into Bayes's rule (rule training). Bayesian computations are simpler to perform with natural frequencies than with probabilities, and there are evolutionary reasons for assuming that cognitive algorithms have been developed to deal with natural frequencies. In 2 studies, the authors compared representation training with rule training; the criteria were an immediate learning effect, transfer to new problems, and long-term temporal stability. Rule training was as good in transfer as representation training, but representation training had a higher immediate learning effect and greater temporal stability. Statistical literacy, like reading and writing, is indispensable for an educated citizenship in a functioning democracy, and the dis-semination of statistical information in the 19th and 20th centuries has been linked to the rise of democracies in the Western world (Porter, 1986). Interest in statistical information such as population
