Week Three

Question 1

Uncertainty

Answer 1

Statistical definition: The probability of an event occurring is not equal to 0 or 1

Question 2

Likelihood judgement

Answer 2

Judgement of how probable an event is to occur or how likely a statement is to be true

Question 3

Heuristics (probabilities)

Answer 3

• Used under the condition of uncertainty
• Simplifies the procedure for obtaining a probability
• Reduces the complexity of obtaining a probability

Question 4

Availability Heuristic

Answer 4

“People assess the frequency of a class or the probability of an event by the ease with which instances or occurrences can be brought to mind” (Tversky & Kahneman, 1974, p 1127)

Question 5

Question: Do people use the availability heuristic when estimating frequencies?

Answer 5

YES - People use the availability heuristic when estimating frequencies

Question 6

Method: Relative frequency-of-occurrence judgement

Answer 6

• Participants given or asked to generate lists of two possible events or items
• Participants asked to determine which item event occurs more frequently

Question 7

Question: Do people use the availability heuristic to estimate frequencies when the actual frequencies are presented?

Answer 7

YES - When people estimate frequencies based on available information, people use the availability heuristic

Question 8

Method: Set-size judgement

Answer 8

• Participants asked to estimate the number of items in the set or class

Question 9

The law of small numbers

Answer 9

The tendency to think of small samples that appear random are representative of the population

Question 10

Do people use the representativeness heuristic?

Answer 10

• YES: people use the representativeness heuristic
• As a consequence, people commit the base-rate fallacy and/or the conjunction fallacy

Question 11

Base rate

Answer 11

Statistics:
- Unconditional probability
- Probability that does not take into account any existing evidence

Question 12

Base rate fallacy

Answer 12

When people estimate probabilities:
- People ignore relevant statistical information
- People favor information based on a single case

Question 13

Conjunction fallacy

Answer 13

• People fail to consider the implications of the word “and” when making probability judgements
• The probability of any one uncertain event can’t be less than the probability that this event and another uncertain event will occur together