Anchoring and judging heuristically

Question 1

Anchoring

Answer 1

1. Based on memory availability
2. People under-adjust
3. Anchoring is usually based on:
   - Average
   - Status quo
   - Projection (anchoring on ourselves) - Because of false consensus effect
   - Anchoring the past on the present (retrospective bias)
4. Salience - Thinking of monetary values v. probabilities of winning and thereby anchor on one or the other - Preference reversals
5. ‘Take the best’ - Use one persuasive salient cue and not even bother to adjust it

Question 2

Estimating frequencies

Answer 2

1. People overestimate low probabilities and underestimate high probabilities
2. Small objective frequencies (1-5 events) are highly accurate whereas bigger ones are often underestimated - Because availability in memory is more difficult to access

Question 3

Availability heuristic process

Answer 3

1. Storage of info in LTM
2. Retention
3. Recognition of situation in which info is relevant
4. Cue memory for relevant info
5. Retrieval of items associated with memory
6. Assess ease of retrieval
7. Estimate frequency based on ease of retrieval

Question 4

Availability heuristic

Answer 4

1. Biased by salience
2. Biased by emotions
3. We under-deduce (from universal to particular) and over-induce (from particular to universal)

Question 5

Sub-additivity

Answer 5

When the sum of probabilities of each outcome equals more than 1

Why? Because each outcome is considered separately. + Unpacking of events by listing the sub-events can lead to higher probability of each outcome

Question 6

Similarity heuristic

Answer 6

1. Can lead to wrong similarity-probability heuristics - Because a subject resembles more a sub-group doesn’t mean it has a higher probability of belonging to the sub-group than to the group!
2. Contrast model:
   - We evaluate similarity by evaluating and comparing the attributes of each subject
   - Listing attributes that match and those that don’t
   - But sometimes we only access one schema to evaluate similarity whereas it might be just as similar to another non-considered schema - We must look at base rates!

Question 7

Ratio rule

Answer 7

Pr(cIS) = Pr(c and S) / Pr(S)

Pr(cIS) / Pr(SIc) = Pr(c) / Pr(S)

Confusion of the inverse - People should consider base rates!