On the conjunction fallacy in probability judgment: New experimental evidence regarding Linda

Abstract

This paper reports the results of a series of experiments designed to test whether and to what extent individuals succumb to the conjunction fallacy. Using an experimental design of Tversky and Kahneman (1983), it finds that given mild incentives, the proportion of individuals who violate the conjunction principle is significantly lower than that reported by Kahneman and Tversky. Moreover, when subjects are allowed to consult with other subjects, these proportions fall dramatically, particularly when the size of the group rises from two to three. These findings cast serious doubts about the importance and robustness of such violations for the understanding of real-life economic decisions.

Same process, different outcomes: group performance in an acquiring a company experiment

“…20 Hence, the group does not meet the truth-wins norm, which is also in line with Charness et al (2010)'s finding about conjunction fallacy reasoning.…”

Does Truth Win When Teams Reason Strategically?

“…Second, we show that in this game teams are only able to create synergies if a sufficient degree of complexity is prevalent. This observation is broadly in line with conjectures by Charness et al (2010) and Cooper and Kagel (2005), who suggest a relation between task complexity and the advantages teams have over individuals. Of course, one has to be careful in drawing general conclusions from this observation but it might explain some of the mixed results on the truth-wins benchmark.…”

“…Moreover, by varying the length of the game we can check whether a relationship between the complexity of the strategic interaction and the differences between individual and team performance exists, as suggested by Charness et al (2010). To our knowledge this is also the first study that allows comparing the ability to apply the fundamental game-theoretic concept of backward induction (in isolation) between teams and individuals.…”

Quantum-like models cannot account for the conjunction fallacy

“…For instance, behavioral economists have looked at the consequences of the fallacy for understanding real life economic behavior, measuring the robustness of this bias in an economic context with incentives or in betting situations (e.g. Charness et al 2010;Nilsson and Andersson 2010;Erceg and Galic 2014). They have also investigated whether the cognitive abilities of subjects are related to behavioral biases in general (and to the conjunction fallacy in particular, cf.…”