MB17GBA223 Saurabh Kumar Gautam

MB17GBA183 Ashu Grover

Chapter 14 & 15 MB17GBA204

MB17GBA209
Mahesh Kumar Yadav
Palak Bhadresh Gandhi
MB17GBA184 Ashutosh Tiwari
MB17GBA174 Agrani Anirudh Mishra
Tom W’s Specialty
Tom W’s Specialty
 Tom W’s Specialty
• first given a sketch of Tom’s personality, we think of
stereotypes, probably comp. sci. for Tom — S1 was activated
by various hints to invoke stereotype — description
deliberately aims at minor fields of study (comp. science,
librarian, engineer), poor fit for more popular fields — i.e. an
anti-base-rate” description — notice that source of
description. is said to be not v. trustworthy
 Predicting by Representativeness
• Representativeness = similarity (S1) to stereotypes — focus on fitness of sketch
w. stereotypes, ignore base rates — happens even w. grad. psych. students or
stat’cians who know relevant base rates, know sketch is not v. reliable
• substitution of similarity (easy) for probability (difficult)
• representativeness vs. base rates
• if only judging similarity, OK to ignore base rates, accuracy of description.
• but ignoring base rates & quality of evidence in probability
assessments à mistakes
• for the public probability is a vague notion (cf. scientist’s precise idea), evokes
S1’s mental shotgun, answers to easier q’s
• S1 assesses representativeness easily — e.g. He looks like a leader
• cf. book/movie Moneyball, rep. vs stats
 The Sins of Representativeness
• Judging probability by the rep’ness heuristic (stereotypes) often
works — e.g. people who look friendly usually are, stereotypes
have some truth — but stereotypes sometimes false, result in
neglect of base rates
• sin of representativeness #1 — too willing to predict occurrence of
unlikely (low base-rate) events — e.g. a person reading NY Times
on NY subway. Which more likely?
• Has a PhD or no college degree
• There are two possible reasons for the failure of System 2—
ignorance or laziness.
• Sin of representativeness #2 — is insensitivity to the quality of
evidence. Recall the rule of System 1: WYSIATI.
• An experiment that was conducted a few years ago with Harvard
undergraduate The experiment combined the old problem with a
modern variation of cognitive fluency. Half the students were told
to puff out their cheeks during the task, while the others were told
to frown.
• Frowning, as we have seen, generally increases the vigilance of
System 2
• Note: when quality of evidence is in doubt, stay close to base rate
(stat’s)
• https://www.youtube.com/watch?v=nSFHFfevfms
 How To Discipline Intuition
• Bayesian statistics — math's rules that gov. how we should
alter assessments (prior beliefs, base rates) in light of evidence
• Don’t believe everything that comes to mind — base rates are
important, even with additional evidence about current case
• keys to Bayesian reasoning:
– 1. anchor judgement of probability on plausible base rate
– 2. question value of evidence — not easy to do
 Speaking of Representativeness
• “The lawn is well trimmed, the receptionist looks competent, and the
furniture is attractive, but this doesn’t mean it is a well-managed company.
I hope the board does not go by representativeness.”
• “This start-up looks as if it could not fail, but the base rate of success in the
industry is extremely low. How do we know this case is different?”
• “They keep making the same mistake: predicting rare events from weak
evidence. When the evidence is weak, one should stick with the base
rates.”
• “I know this report is absolutely damning, and it may be based on solid
evidence, but how sure are we? We must allow for that uncertainty in our
thinking.”
Linda: Less Is More
How we look at it !
Less Is More, Sometimes Even In Joint Evaluation
 Less Is More, Sometimes Even In Joint Evaluation
• more on the conjunction fallacy, conflict between intuition & logic
• joint evaluation (when viewing both sets), higher value placed on Set A, used
logic correctly — but single evaluation ( when viewing only one at a time), higher
value placed on Set B, used S1’s intuition — “less is more,” S1 rep’s sets as
averages, norms, so average value of B is higher than A, broken dishes lower
average
• similar results for joint/single evaluation w. sets of baseball cards, A all high
value, B same high value cards plus several lower value
• problem for econ. theory, adding items should increase value of set
• S1 takes average of sets instead of adding — but probability is a sum-
like variable — e.g. probability (Linda is a teller) = probability (Linda is feminist
teller) + probability (Linda is non-feminist teller)
• S2 not v. alert
 Speaking of Less Is More
• “They constructed a very complicated scenario and insisted on
calling it highly probable. It is not—it is only a plausible story.”
• “They added a cheap gift to the expensive product, and made
the whole deal less attractive. Less is more in this case.”
• “In most situations, a direct comparison makes people more
careful and more logical. But not always. Sometimes intuition
beats logic even when the correct answer stares you in the
face.”
THANK YOU 