Behavioral Decision Theory: A New Approach

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Cambridge University Press, Sep 30, 1994 - Mathematics - 314 pages
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This book discusses the well-known fallacies of behavioral decision theory. It shows that while an investigator is studying a fallacy, he or she may introduce without realizing it, one of the simple biases that are found in quantifying judgments. The work covers such fallacies as the apparent overconfidence that people show when they judge the probability of correctness of their answers to two-choice general knowledge questions using a one-sided rating scale; the apparent overconfidence in setting uncertainty bounds on unknown quantities when using the fractile method; the interactions between hindsight and memory; the belief that small samples are as reliable and as representative as are large samples; the conjunction fallacy for Linda and Bill; the causal conjunction fallacy; the regression fallacy in prediction; the neglect of the base rate in the Cab problem, in predicting professions, and in the Medical Diagnosis problem; the availability and simulation fallacies; the anchoring and adjustment biases; Prospect theory; and bias by frames. The aim of this book is to help readers to learn about the fallacies and to avoid them.
 

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Contents

Chapter 1 Outline of heuristics and biases
1
Chapter 2 Practical techniques
17
Chapter 3 Apparent overconfidence
33
Chapter 4 Hindsight bias
62
Chapter 5 Small sample fallacy
78
Chapter 6 Conjunction fallacy
105
Chapter 7 Regression fallacy
127
Chapter 8 Base rate neglect
138
Chapter 11 Expected utility fallacy
194
Chapter 12 Bias by frames
220
Chapter 13 Simple biases accompanying complex biases
241
Chapter 14 Problem questions
254
Chapter 15 Training
276
Chapter 16 Overview
286
References
302
Index
310

Chapter 9 Availability and simulation fallacies
162
Chapter 10 Anchoring and adjustment biases
187

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