Book contents
- Frontmatter
- Acknowledgments
- Contents
- Preface
- Chapter 1 Outline of heuristics and biases
- Chapter 2 Practical techniques
- Chapter 3 Apparent overconfidence
- Chapter 4 Hindsight bias
- Chapter 5 Small sample fallacy
- Chapter 6 Conjunction fallacy
- Chapter 7 Regression fallacy
- Chapter 8 Base rate neglect
- Chapter 9 Availability and simulation fallacies
- Chapter 10 Anchoring and adjustment biases
- Chapter 11 Expected utility fallacy
- Chapter 12 Bias by frames
- Chapter 13 Simple biases accompanying complex biases
- Chapter 14 Problem questions
- Chapter 15 Training
- Chapter 16 Overview
- References
- Index
Chapter 2 - Practical techniques
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Acknowledgments
- Contents
- Preface
- Chapter 1 Outline of heuristics and biases
- Chapter 2 Practical techniques
- Chapter 3 Apparent overconfidence
- Chapter 4 Hindsight bias
- Chapter 5 Small sample fallacy
- Chapter 6 Conjunction fallacy
- Chapter 7 Regression fallacy
- Chapter 8 Base rate neglect
- Chapter 9 Availability and simulation fallacies
- Chapter 10 Anchoring and adjustment biases
- Chapter 11 Expected utility fallacy
- Chapter 12 Bias by frames
- Chapter 13 Simple biases accompanying complex biases
- Chapter 14 Problem questions
- Chapter 15 Training
- Chapter 16 Overview
- References
- Index
Summary
Summary
The probabilities of 2 mutually exclusive alternatives are combined by addition. Equivalent probabilities can be combined by averaging. Probabilities derived from 2 independent estimates of the same distribution of scores can be combined by Stouffer's Z method or by Fisher's chi squared method. Independent probabilities of the same event should be combined using the Bayes product of odds. The conjoint probability of 2 independent events with unknown outcomes is calculated by multiplication. There are 3 general approaches for dealing with problems with multiple uncertainties. Decision makers can ask an expert professional to give a judgment. They can follow conventional practices, or they can make a formal analysis like a decision analysis or cost-benefit analysis.
Combining probabilities
Table 2.1 lists 6 different methods of combining probabilities. Table 2.2 gives the numerical values when each method is used to combine a probability of .1 with probabilities ranging from .05 through .5. In the column headings of Table 2.2 the methods are numbered 1 through 6, from the method giving the highest combined probabilities on the left to the method giving the lowest combined probabilities on the right.
- Type
- Chapter
- Information
- Behavioral Decision TheoryA New Approach, pp. 17 - 32Publisher: Cambridge University PressPrint publication year: 1994