Judgments of Risk Frequencies: Tests of Possible Cognitive Mechanisms.

Abstract

How do people judge which of 2 risks claims more lives per year? The authors specified 4 candidate mechanisms and tested them against people's judgments in 3 risk environments. Two mechanisms, availability by recall and regressed frequency, conformed best to people's choices. The same mechanisms also accounted well for the mapping accuracy of estimates of absolute risk frequencies. Their nearly indistinguishable level of performance is remarkable given their different assumptions about the underlying cognitive processes and the fact that they give rise to different expectations regarding the accuracy of people's inferences. The authors discuss this seeming paradox, the lack of impact of financial incentives on judgmental accuracy, and the dominant interpretation of inaccurate inferences in terms of biased information processing.

Exaggerated risk: Prospect theory and probability weighting in risky choice.

“…Reliance on such sources may have some validity (cf. Hertwig, Pachur & Kurzenhäuser, 2005) but may induce erroneous feelings that some sorts of risk are more frequent than others (e.g., Lichtenstein, Slovic, Fischhoff, Layman & Combs, 1978). For instance, the familiarity bias reported by Fox and Levav (2000) showed that people typically judged more familiar events to be more probable than less familiar events, more often than they judged the complement of the same less familiar event to be more probable than the complement of the more familiar events.…”

“…When evaluating risks for insurance people do not usually use statistical evidence about the probability of risky events. Instead people may commonly rely on inferences based on what they remember hearing or observing about a particular risk (Hertwig, Pachur & Kurzenhäuser, 2005;Slovic, Fischhoff & Lichtenstein, 1979;Tversky & Kahneman, 1973). According to the accessibility framework (Kahneman, 2003;Koriat, 1993Koriat, , 1995Tulving & Pearlstone, 1966), people's judgments are based on the amount and intensity of the information accessed in the course of a particular task.…”

Project managers’ overconfidence: how is risk reflected in anticipated project success?

“…Availability heuristic proposes that people assess the probability of an event by the ease with which occurrences of similar events can be recalled (Schwarz et al 1991;Tversky and Kahneman 1973). The availability of risks has been confirmed to highly correlate with people's judgments of risk occurrence probabilities (Hertwig et al 2005;Pachur et al 2012). When risks occur, they can evoke strong emotions (Pachur et al 2012).…”

Judgments relative to patterns: How temporal sequence patterns affect judgments and memory.

“…For example, when judging the frequency of some sort of event, participants might retrieve and count instances of the event (enumeration) or rely on memory assessment, for example by using an ease of retrieval heuristic (Tversky & Kahneman, 1973;1974). Indeed, several studies suggest that the judgments of frequency of experienced events are made according to the ease with which instances/occurrences can be brought to mind (e.g., Hastie & Park, 1986;Hertwig, Pachur & Kurzenhäuser, 2005;Tversky & Kahneman, 1973). Crucially, both enumeration and memory assessment strategies imply the expectation of a direct relationship between memory and judgment.…”