Textbook Notes (363,166)
Chapter 16

# Statistical Sciences 1023A/B Chapter 16: Chapter 16 Premium

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School
Western University
Department
Statistical Sciences
Course
Statistical Sciences 1023A/B
Professor
Lori Murray
Semester
Winter

Description
Psychological Influences on Personal Probability Personal probabilities are values assigned by individuals based on how likely they think events are to occur No single correct value but should still follow the rules Equivalent Probabilities, Different Decisions People are willing to pay more to increase their probability of a favourable outcome = certainty effect Possibility effect = impact of increasing a favorable outcome from 0 to a small probability Certainty Possibility Effects More people are willing to pay a fixed amount to bring the risk down to zero More likely to pick certainty Pseudocertainty Effect Rather than being offered a reduced risk on a variety of problems, you are offered a complete reduction of risk on certain problems and no reduction on others. The Availability Heuristic Substitutes one question for another: you wish to estimate the size of a category or frequency of an event, but instead you report an impression of the ease with which instances come to mind. Availability can cloud judgement The more you know of something or the more it happens, the more likely it is to be on your mind Having people vividly imagine an event can encourage availability in which the probabilities of risk can be distorted Anchor = reference point from which someone can adjust up or down in terms of distorted perceptions. Anchoring is the most effective when the anchor is extreme in one direction or the other. It does not need to take the form of a numerical assessment. Representativeness Heuristic and the Conjunction Fallacy Leads people to assign higher probability than are warranted to scenarios that are representative of how we imagine things would happen. Used to affect your judgement by giving you a detailed scenario about how an event is likely to happen
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