Discusses three causes of cognitive bias: the availability heuristic, the representativeness heuristic, and the anchoring effect. Faulty judgments caused by these are common, including in experts, such as doctors or even statisticians.

Notes

Regression to the mean

The failure to recognize the import of regression can have pernicious consequences, as illustrated by the following observation (1). In a discussion of flight training, experienced instructors noted that praise for an exceptionally smooth landing is typically followed by a poorer landing on the next try, while harsh criticism after a rough landing is usually followed by an improvement on the next try. The instructors concluded that verbal rewards are detrimental to learning, while verbal punishments are beneficial, contrary to accepted psychological doctrine. This conclusion is unwarranted because of the presence of regression toward ithe mean. As in other cases of repeated examination, an improvement will usually follow a poor performance and a deterioration will usually follow an outstanding performance, even if the instructor does not respond to the trainee's achievement on the first attempt. Because the instructors had praised their trainees after good landings and admonished them after poor ones, they reached the erroneous and potentially harmful conclusion that punishment is more effective than reward.

Probabilities of conjunctions and disjunctions

Studies of choice among gambles and of judgments of probability indicate that people tend to overestimate the probability of conjunctive events (10) and to underestimate the probability of disjunctive events. These biases are readily explained as effects of anchoring. The stated probability of the elementary event (success at any one stage) provides a natural starting point for the estimation of the probabilities of both conjunctive and disjunctive events. Since adjustment from the starting point is typically insufficient, the final estimates remain too close to the probabilities of the elementary events in both cases. Note that the overall probability of a conjunctive event is lower than the probability of each elementary event, whereas the overall probability of a disjunctive event is higher than the probability of each elementary event. As a consequence of anchoring, the overall probability will be overestimated in conjunctive problems and underestimated in disjunctive problems.

Prediction calibration

By collecting subjective probability distributions for many different quantities, it is possible to test the judge for proper calibration. A judge is properly (or externally) calibrated in a set of problems if exactly Π percent of the true values of the assessed quantities falls below his stated values of X_Π. For example, the true values should fall below X₀₁ for 1 percent of the quantities and above X₉₉ for 1 percent of the quantities. Thus, the true values should fall in the confidence interval between X₀₁ and X₉₉ on 98 percent of the problems.

Summary

This article described three heuristics that are employed in making judgments under uncertainty: (i) representativeness, which is usually employed when people are asked to judge the probability that an object or event A belongs to class or process B; (ii) availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development; and (iii) adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.