01:730:105 Lecture Notes - Lecture 25: Illusory Truth Effect, Loss Aversion, Confirmation Bias
Current Moral & Social Issues
Cognitive Biases
- Framing: Kahneman on perception, intuition (system 1) and reasoning (system 2)
- Some socially relevant cognitive biases
- Reading comprehension vs. critical reading
- Confirmation bias
- Gambler’s fallacy
- Framing effects & loss aversion
- Illusory truth effect
- Gambler’s Fallacy
- I’ve just flipped an ordinary coin five times. It came up tails every time. What’s the probability
it will come up heads next time?
- Less than 50%
- 50%
- More than 50%
- What are the odds of tails six times in a row? That’s super unlikely! So it’s super unlikely that
the next one will be tails!
- Starting from scratch, the probability of getting six tails in a row is very small. (1/64)
- But once you’ve got five in a row, the probability of going on to six in a row is just the usual
probability of tails. (1/2)
- (The probability that any particular six-flip sequence will be TTTTTT is 1/64. But the
probability that a six-flip sequence that started of TTTTT will go on to be TTTTTT is 1/2.)
- Places where this arises:
- Actual gambling
- Sports
- Loan officers and asylum seekers
- Framing Effects & Loss Aversion
- Imagine that the United States is preparing for the outbreak of an unusual disease, which is
expected to kill 600 people.
- Two alternative programs to combat the disease have been proposed.
- Assume that the exact scientific estimates of the consequences of the programs are as follows:
- If Program A is adopted, 200 people will be saved.
- If Program B is adopted, there is a one-third probability that 600 people will be saved and a
two-thirds probability that no people will be saved.
- Which one of the two programs would you favor?
Document Summary
Framing: kahneman on perception, intuition (system 1) and reasoning (system 2) I"ve just flipped an ordinary coin five times. More than 50% the next one will be tails! But once you"ve got five in a row, the probability of going on to six in a row is just the usual. Starting from scratch, the probability of getting six tails in a row is very small. (1/64) probability of tails. (1/2) (the probability that any particular six-flip sequence will be tttttt is 1/64. But the probability that a six-flip sequence that started of ttttt will go on to be tttttt is 1/2. ) Imagine that the united states is preparing for the outbreak of an unusual disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program a is adopted, 200 people will be saved.