Heuristics and biases Tina Nane 2 Heuristics and biases Lotto - PowerPoint PPT Presentation

1 Heuristics and biases Tina Nane

2 Heuristics and biases “Lotto Icon” by Dapete is licensed under CC BY 2.5

2 Heuristics and biases • Heuristics “Lotto Icon” by Dapete is licensed under CC BY 2.5 • Tricks, rules of thumb, habits to reason under uncertainty

2 Heuristics and biases • Heuristics “Lotto Icon” by Dapete is licensed under CC BY 2.5 • Tricks, rules of thumb, habits to reason under uncertainty • Errors • Violation of the axioms of probability • Estimates not in accordance with one’s belief

2 Heuristics and biases • Heuristics “Lotto Icon” by Dapete is licensed under CC BY 2.5 • Tricks, rules of thumb, habits to reason under uncertainty • Errors • Violation of the axioms of probability • Estimates not in accordance with one’s belief

2 Heuristics and biases • Heuristics “Lotto Icon” by Dapete is licensed under CC BY 2.5 • Tricks, rules of thumb, habits to reason under uncertainty • Errors • Violation of the axioms of probability • Estimates not in accordance with one’s belief • Bias • “misperceptions” of probabilities

3 Biases • Anchoring • Availability • Confirmation bias • Representativeness • Conservatism bias • Ostrich effect • Overconfidence • Control

3 Biases • Anchoring "Bury your head in the sand" by Sander van der Wel is licensed under CC BY-NC-ND 2.0 • Availability • Confirmation bias • Representativeness • Conservatism bias • Ostrich effect • Overconfidence • Control

4 Biases • Anchoring • Availability • Confirmation bias • Representativeness • Conservatism bias • Ostrich effect • Overconfidence • Control

5 Availability • “If you can think of it, it must be important” (Tversky & Kahneman) • The frequency with which a given event occurs is usually estimated by the ease with which instances can be recalled

6 Availability "Plane takes off" by Oregon Department of Transportation is licensed under CC BY-NC-ND 2.0

7 Availability "chiang rai to chiang mai" by arcibald is licensed under CC BY-NC 2.0 “Plane crash into Hudson River ” by Greg L am Pak Ng is licensed under CC BY 2.0

8 Availability “Earthquake, Tsunami, Nuclear Disaster” by DonkeyHotey is licensed under CC BY-SA 2.0

9 Availability “Earthquake, Tsunami, Nuclear Disaster” by DonkeyHotey is licensed under CC BY-SA 2.0 "Johns Hopkins Inlet under partially sunny skies (!)" by roy.luck is licensed under CC BY 2.0

10 • Want to get $6,500 ‘IJ-hallen-003 by Davy Landman is licensed under CC BY-SA 2.0 • Advertise it for $7,500

11 Anchoring Judgment under uncertainty: Heuristics and biases • “Anchor” by EugeneZelenko is licensed under CC.0 (Kahneman & Tversky,1974) When we estimate a probability, we • • First produce a number Then consider arguments for shifting that number up or • down • The estimate might depend too much on the initial number

12 Anchoring “Anchor” by EugeneZelenko is licensed under CC.0 • Subjects are asked to estimate the 5% and 95% quantiles of a continuous probability distribution • Often experts “anchor” too close to the central value • Distributions are often “too concentrated”

13 Overconfidence "un-overconfidence" by genebrooks is licensed under CC BY 2.0 • Tendency to think that one knows more than one in fact knows • “the most significant of the cognitive biases” (Kahneman, 2011) "1334276584137_154" by 璇梓 "High Power Channel-type Reactor" by Kamil "Atlantis 8 Julio 2011 Launch" by mikeb2012 Porembi ń ski is licensed under CC BY-SA 2.0 is licensed under CC BY-SA 2.0 is licensed under CC BY 2.0

14 Overconfidence "un-overconfidence" by genebrooks is licensed under CC BY 2.0 • 93% of American drivers claim to be better than the median (Svenson, 1981) "0012_10" by Frisno is licensed under CC BY-NC-ND 2.0

15 Control “Control” by Nick Youngson is licensend under CC BY-SA 3.0 • Belief that if some aspect of an event is controllable, then its probability is influenced “ L o t t o I c o n ” b y D a p e t e i s l i c e n s e d u n d e r C C B Y 2 . 5

16 Why do we care? “Bias” by Nick Youngson I s licensed under CC BY-SA 3.0 • People, including experts, frequently use heuristics to handle subjective probabilities, leading to potentially biased assessments. Important to be aware of these biases, and to “fix” • them or develop expert elicitation methods that minimise biases.

17 Want to read more? “Bias” by Nick Youngson I s licensed under CC BY-SA 3.0 1. Kahneman, D., Slovic, S. P ., Slovic, P ., & Tversky, A. (Eds.). (1982). Judgment under uncertainty: Heuristics and biases . Cambridge university press. 2. Cooke, R. (1991). Experts in uncertainty: opinion and subjective probability in science . Oxford University Press on Demand. 3. Kahneman, D. (2011). Thinking, fast and slow . Macmillan.

18 Thank you for your attention!