Training conditional and cumulative risk judgements: the role of frequencies, problem-structure and einstellung

Understanding Cumulative Risk Perception from Judgments and Choices: An Application to Flood Risks

Catastrophic events, such as floods, earthquakes, hurricanes, and tsunamis, are rare, yet the cumulative risk of each event occurring at least once over an extended time period can be substantial. In this work, we assess the perception of cumulative flood risks, how those perceptions affect the choice of insurance, and whether perceptions and choices are influenced by cumulative risk information. We find that participants' cumulative risk judgments are well represented by a bimodal distribution, with a group that severely underestimates the risk and a group that moderately overestimates it. Individuals who underestimate cumulative risks make more risk-seeking choices compared to those who overestimate cumulative risks. Providing explicit cumulative risk information for relevant time periods, as opposed to annual probabilities, is an inexpensive and effective way to improve both the perception of cumulative risk and the choices people make to protect against that risk.

Why Can Only 24% Solve Bayesian Reasoning Problems in Natural Frequencies: Frequency Phobia in Spite of Probability Blindness

For more than 20 years, research has proven the beneficial effect of natural frequencies when it comes to solving Bayesian reasoning tasks (Gigerenzer and Hoffrage, 1995). In a recent meta-analysis, McDowell and Jacobs (2017) showed that presenting a task in natural frequency format increases performance rates to 24% compared to only 4% when the same task is presented in probability format. Nevertheless, on average three quarters of participants in their meta-analysis failed to obtain the correct solution for such a task in frequency format. In this paper, we present an empirical study on what participants typically do wrong when confronted with natural frequencies. We found that many of them did not actually use natural frequencies for their calculations, but translated them back into complicated probabilities instead. This switch from the intuitive presentation format to a less intuitive calculation format will be discussed within the framework of psychological theories (e.g., the Einstellung effect).

Instruction in information structuring improves Bayesian judgment in intelligence analysts

An experiment was conducted to test the effectiveness of brief instruction in information structuring (i.e., representing and integrating information) for improving the coherence of probability judgments and binary choices among intelligence analysts. Forty-three analysts were presented with comparable sets of Bayesian judgment problems before and immediately after instruction. After instruction, analysts' probability judgments were more coherent (i.e., more additive and compliant with Bayes theorem). Instruction also improved the coherence of binary choices regarding category membership: after instruction, subjects were more likely to invariably choose the category to which they assigned the higher probability of a target's membership. The research provides a rare example of evidence-based validation of effectiveness in instruction to improve the statistical assessment skills of intelligence analysts. Such instruction could also be used to improve the assessment quality of other types of experts who are required to integrate statistical information or make probabilistic assessments.

Long-term persistence of sort strategy in free classification

Two free classification experiments that investigate the persistence of sort strategy are reported. Participants tend to persist with their initial categorization type (family resemblance or unidimensional) for the remaining sorts, overriding the effects of otherwise influential stimulus properties. Sort type was found to persist even after a one-week delay. Stimulus-driven models of free classification (e.g., the SUSTAIN model, [Love, B. C., Medin, D. L., & Gureckis, T. M. (2004). SUSTAIN: A network model of category learning. Psychological Review, 111, 309-332]) cannot predict the sort type persistence effects we observe, but they are naturally accounted for by theories that posit strategic selection of a problem-solving strategy (e.g., Hypothesis theory, [Levine, M. (1971). Hypothesis theory and nonlearning despite ideal S-R-reinforcement contingencies. Psychological Review, 78, 130-140]).

From base-rate to cumulative respect

The tendency to neglect base-rates in judgment under uncertainty may be “notorious,” as Barbey & Sloman (B&S) suggest, but it is neither inevitable (as they document; see also Koehler 1996) nor unique. Here we would like to point out another line of evidence connecting ecological rationality to dual processes, the failure of individuals to appropriately judge cumulative probability.