In this chapter, I review recent empirical findings on knowledge attributions in lottery cases and report a new experiment that advances our understanding of the topic. The main novel finding is that people deny knowledge in lottery cases because of an underlying qualitative difference in how they process probabilistic information. “Outside” information is generic and pertains to a base rate within a population. “Inside” information is specific and pertains to a particular item’s propensity. When an agent receives information that 99 percent of all lottery tickets lose (outside information), people judge that she does not know that her ticket will lose. By contrast, when an agent receives information that her specific ticket is 99 percent likely to lose (inside information), people judge that she knows that her ticket will lose. Despite this difference in knowledge judgments, people rate the likelihood of her ticket losing exactly the same in both cases (i.e., 99 percent). The results shed light on other factors affecting knowledge judgments in lottery cases, including formulaic expression and participants’ own estimation of whether it is true that the ticket will lose. The results also undermine previous hypotheses offered for knowledge denial in lottery cases, including the hypotheses that people deny knowledge because they either deny justification or acknowledge a chance for error.
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