01/18

Choice Architecture

The Law of Small Numbers

• The system 2 works on the facts and suggestions retrieved from associate memory pulled by System 1.
• System 1 is highly adept in one form of thinking - it automatically and effortlessly identifies causal connections between events.
• "A random event, by definition, does not lend itself to explanation, but collections of random events do behave in a highly regular fashion.
• The deeper truth is that there is nothing to explain.
• 1. Large samples are more precise than smaller samples. 2. Small samples yield extreme results more often than large samples do.
• You are not alone.

The Law of small numbers

• The risk of error can be estimated for any given sample size by a fairly simple procedure.
• I was not the only fool.
• Intuitions about random sampling appear to satisfy the law of small numbers, which asserts that the law of large numbers applies to small numbers as well.

A Bias of Confidence over Doubt

• People are not adequately sensitive to sample size.
• What You See Is All There IS (WYSIAT) suggests that System 1 cannot distinguish degrees of belief.
• The law of small numbers is a manifestation of a general bias that favors certainty over doubt, which will turn up in many guises in small number.
• We are prone to exaggerate the consistency and coherence of what we see.

Cause and Chance

• Instead of focusing on how the event at hand came to be, the statistical view relates it to what could have happened instead.
• We are pattern seekers, believers in a coherent world, in which regularities appear not by accident but as a result of mechanical causality or of someone's intention.
• The widespread misunderstanding of randomness sometimes has signification consequences.
• The tendency to see patterns in randomness is overwhelming certainly more impressive than a guy making a study.
• We pay more attention to the content of messages than to information about their reliability, and as a result ed up with a view of the world around is that is simpler and more coherent than the data justify.

The science of availability

• The process of guiding frequency by the was with which instance come to mind.
• The availability heuristic, like other heuristics of judgment, substitutes one question for another: you wish to estimate the size of a category or the frequency of an event, but you report an impression of the ease with which instances come to mind.
• Resisting this large collection of potential availability basis is possible, but tiresome.
• The mere observation that there is usually more than 100% credit to go around is sometimes sufficient to defuse the situation.

The psychology of availability

• Self-ratings were dominated by the ease with which examples had come to mind.
• People are less confident in a choice when they are asked to produce more arguments to support it.
• People are less confident that an event was avoidable after listing more ways it could have been avoided.
• The availability heuristics that the subjects apply is better described as an "unexplained unavailability" heuristic. • Judgements are no longer influenced by ease of retrial when the experience of fluency is given a spurious explanation by the presence of curved or straight text boxes, by the background color of
the screen, or by other irrelevant factors that the experimenters dreamed up. • System 1 has the ability to set expectations and to be surprised when these expectations are violated.
• System 2 can reset expectations of System 1 on the fly, so that an event that would normally be surprising is now almost normal.
• The ease with which instances come to mind is a System 1 heuristic, which is replaced by a focus on content when System 2 is more engaged.

Conditions in which people Go with the Flow

• When they are engaged in another effortful task at the same time.
• When they are in a good mood because they thought of a happy episode in their life.
• If they score low on a depression scale.
• If they are knowledgeable noise on the topic of the task, in contrast to true experts.
• When they score high on a scale of faith in intuition.
• If they are powerful. (Authority, System 1)

"I don't spend a lot of time taking polls around the world to tell me what I think is the right way to act. I've just go to know how I feel"

Availability, Emotion and Risk

• The dynamics of memory help explain the recurrent cycles of disaster, concern, and growing complacency that are familiar to students of large-scale emergencies.

Availability and Affect

• The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed.
• The affect heuristic is an instance of substitution, in which the answer to an easy question (How do I feel about it?) serves as an answer to a much harder question (What do I think about it?).

The emotional tail wags the rational dog

• The affect heuristic simplifies our lives by creating a world that is much tidier than reality.

The public and the experts

• Experiences often measure risks by the number of lives (or life-years) lost, while the public draws finer distinctions, for examples between "good deaths" and "bad deaths", or between random accidental fatalities and deaths that occur in the course of voluntary activities such as skiing.

"Risk" does not exist "out there, independent of our minds and culture, waiting to be measured. Human beings have invented the concept of "risk" to help them understand and cope with dangers and uncertainties of life. Although these dangers are real, there is no such thing as "real risk" or "objective risk".

• Every policy question involves assumptions about human nature, in particular about the choices that people may make and the consequences of their choices for themselves and for society.
The availability cascade, In the social context, "all heuristics are equal, but availability is more equal than the others."
• The amount of concern is not adequately sensitive to the probability of harm; you imagining the numerator - the tragic story you saw on the news and not thinking about the denominator.
• Rational or not, fear is painful and debilitating, and policy makers must endeavor to protect the public from fear, not only from real dangers.

Tom W's Speciality

• The similarity of an individual to the stereotype of a group is unaffected by the size of the group.
• Anyone who ignores base rates and the quality of evidence in probability assessments will certainly make mistakes.
• System 1 generates an impression of similarity without intending to do so.

The Sins of Representativeness

• One sin of representativeness is an excessive willingness to predict the occurrence of unlikely events.
• Frowning as we have seen, generally increases the vigilance of System 2 and reduces both overconfidence and the reliance on intuition.
• There are two possible reasons for the failure of System 2 - ignorance or laziness.

How to discipline Intuition

• To be useful, your beliefs should be constrained by the logic of probability.
• First, the base rates matter, even in the presence of evidence about the case at hand.
• Second, intuitive impressions of the diagnostically of evidence are often exaggerated.

The essential keys to disciplined Bayesian reasoning can be simply summarized: 1. Anchor your judgement of the probability of an outcome on a plausible base rate. 2. Question the diagnostically of your evidence.

Linda: Less is More

• When you specify a possible even in great detail you can only lower its probability.
Conjunctional fallacy, which people commit when they judge a conjunction of two events to be more probable than one of the events in a direct comparison.
• The most coherent stories are not necessarily the most probably, but they are plausible, and the notions of coherence, plausibility and probability are easily confused by the unwary.
• The more detailed outcome is only more detailed, it is not more plausible or more coherent or a better story.

Less is more, sometimes even in joint Evaluation

• System 1 averages instead of adding so when the non-feminist bank tellers are removed from the set, subjective probability increases.

Why is the question "How many of the 100 participants..." so much easier than "What percentage..."?

• The solution to the puzzle appears to be that a question phrased as "how many?" makes you think of individual, but the same question phrased as "what percentage?" does not.
• System 2 is not impressively alert. The laziness of System 2 is an important fact of life, and the observation that representativeness can block the application of an obvious logical rule is also of some interest.
• Intuition governs judgements in the between-subjects condition; logic rules in join evaluation.
• If you visit a courtroom you will observe that lawyers apply two styles of criticism: to demolish a case they raise doubts about the strongest arguments that favor it; to discredit a witness they focus on the weakest part of the testimony.

"They added a cheap gift to the expensive product, and made the whole deal less attractive. Less is more in this case."

END
UP NEXT