Humans and animals make inferences about the world under limited time and knowledge. In contrast, many models of rational inference treat the mind as a Laplacean Demon, equipped with unlimited time, knowledge, and computational might. Following H. Simon’s notion of satisficing, the authors have proposed a family of algorithms based on a simple psychological mechanism: one reason decision making. These fast and frugal algorithms violate fundamental tenets of classical rationality: They neither look up nor integrate all information. By computer simulation, the authors held a competition between the satisficing “Take The Best ” algorithm and various “rational ” inference procedures (e.g., multiple regression). The Take The Best algorithm matched or outperformed all competitors in inferential speed and accuracy. This result is an existence proof that cognitive mechanisms capable of successful performance in the real world do not need to satisfy the classical norms of rational inference. Organisms make inductive inferences. Darwin (1872/1965) observed that people use facial cues, such as eyes that waver and lids that hang low, to infer a person’s guilt. Male toads, roaming through swamps at night, use the pitch of a rival’s croak to infer its size when deciding whether to fight (Krebs & Davies, 1987). Stock brokers must make fast decisions about which of several stocks to trade or invest when only limited information is available. The list goes on. Inductive

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the heuristics-and-biases approach to statistical reasoning is and is not about. At issue is the imposition of unnecessarily narrow norms of sound reasoning that are used to diagnose so-called cognitive illusions and the continuing reliance on vague heuristics that explain everything and nothing. D. Kahneman and A. Tversky (1996) incorrectly asserted that Gigerenzer simply claimed that frequency formats make all cognitive illusions disappear. In contrast, Gigerenzer has proposed and tested models that actually predict when frequency judgments are valid and when they are not. The issue is not whether or not. or how often, cognitive illusions disappear. The focus should be rather the construction of detailed models of cognitive processes that explain when and why they disappear. A postscript responds to Kahneman and Tversky's (1996) postscript. I welcome Kahneman and Tversky's (1996) reply to my critique (e.g., Gigerenzer, 1991, 1994; Gigerenzer & Murray, 1987) and hope this exchange will encourage a rethinking of research strategies. I emphasize research strategies, rather than specific empirical results or even explanations of those results, because I believe that this debate is fundamentally about what

What counts as human rationality: reasoning processes that embody content-independent formal theories, such as propositional logic, or reasoning processes that are well designed for solving important adaptive problems? Most theories of human reasoning have been based on content-independent formal rationality, whereas adaptive reasoning, ecological or evolutionary, has been little explored. We elaborate and test an evolutionary approach, Cosmides’ (1989) social contract theory, using the Wason selection task. In the first part, we disentangle the theoretical concept of a “social contract” from that of a “cheater-detection algorithm.” We demonstrate that the fact that a rule is perceived as a social contract—or a conditional permission or obligation, as Cheng and Holyoak (1985) proposed—is not sufficient to elicit Cosmides’ striking results, which we replicated. The crucial issue is not semantic (the meaning of the rule), but pragmatic: whether a person is cued into the perspective of a party who can be cheated. In the second part, we distinguish between social contracts with bilateral and unilateral cheating options. Perspective change in contracts with bilateral cheating options turns P & not-Q responses into not-P & Q responses. The results strongly support social contract theory, contradict availability theory, and cannot be accounted for by pragmatic reasoning schema theory, which lacks the pragmatic concepts of perspectives and cheating detection.

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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

Evolutionary approaches to judgment under uncertainty have led to new data showing that untutored subject reliably produce judgments that conform to may principles of probability theory when (a) they are asked to compute a frequency instead of the probability of a single event, and (b) the relevant information is expressed as frequencies. But are the frequencycomputation systems implicated in these experiments better at operating over some kinds of input than others? Principles of object perception and principles of adaptive design led us to propose the individuation hypothesis: that these systems are designed to produce wellcalibrated statistical inferences when they operate over representations of “whole ” objects, events, and locations. In a series of experiments on Bayesian reasoning, we show that human performance can be systematically improved or degraded by varying whether a correct solution requires one to compute hit and false-alarm rates over “natural ” units, such as whole objects, as opposed to inseparable aspects, views, and other parsings that violate evolved principles of object construal. The ability to make well-calibrated probability judgments depends, at a very basic level, on the ability to count. The

People feel they understand complex phenomena with far greater precision, coherence, and depth than they really do; they are subject to an illusion—an illusion of explanatory depth. The illusion is far stronger for explanatory knowledge than many other kinds of knowledge, such as that for facts, procedures or narratives. The illusion for explanatory knowledge is most robust where the environment supports real-time explanations with visible mechanisms. We demonstrate the illusion of depth with explanatory knowledge in Studies 1–6. Then we show differences in overconfidence about knowledge across different knowledge domains in Studies 7–10. Finally, we explore the mechanisms behind the initial confidence and behind overconfidence in Studies 11 and 12, and discuss the implications of our findings for the roles of intuitive theories in concepts and cognition.

Please do not quote or cite without permission of the authors Overconfidence in interval estimates 2 Many studies over the last several decades have found that people are generally overconfident about the accuracy of their knowledge. This generalization has been overturned by a number of recent, carefully controlled studies. These studies show little or no overall bias when judges express confidence in a choice between two alternative answers to a question. Apparent overconfidence is due primarily to unsystematic error in judgments, combined with an unrepresentative selection of task items. However, Klayman et al. (1999), found that substantial overconfidence persisted under equivalently controlled conditions with a different type of confidence judgment. When judges are asked to provide intervals such that they are x % sure the correct answer is within the interval, the answer falls inside their interval much less than x % of the time. The present paper shows that, although unsystematic judgmental error may contribute to overconfidence, subjective confidence intervals are indeed systematically too narrow—

Consumer knowledge is seldom complete or errorless. Therefore, the self-assessed validity of knowledge and consequent knowledge calibration (i.e., the correspondence between self-assessed and actual validity) is an important issue for the study of consumer decision making. In this article we describe methods and models used in calibration research. We then review a wide variety of empirical results indicating that high levels of calibration are achieved rarely, moderate levels that include some degree of systematic bias are the norm, and confidence and accuracy are sometimes completely uncorrelated. Finally, we examine the explanations of miscalibration and offer suggestions for future research. Consumers are overconfident—they think they know more than they actually do. Our simple goal is to evaluate this proposition. Ultimately, we conclude that overconfidence is indeed a robust phenomenon and can be adopted by researchers as a stylized fact about human cognition; however, there are critical qualifications and