RSM450H1 Study Guide - Final Guide: Fallacy, Intelligence Quotient, Fundamental Attribution Error
Document Summary
Heuristics = simple rules of thumbs and mental shortcuts. Biases = systematic errors that are a result of the use of heuristics. Representative heuristic: specific scenes appear more likely because they are more representative of how we imagine events. Bias: conjunction fallacy we assume the co-occurrence of two events is more likely than just one (although statistically it is not more probable). Bias: law of small numbers small samples are expected to be highly representative of the entire population (e. g. iq test scores of 50 students) Bias: gambler"s fallacy belief that an unsuccessful outcome is due after a run of good luck and that chance is self-correcting. Bias that every part of a sequence should be locally representative of the overall probability. Bias: hot hand belief a player has a better chance of success after multiple successes. Bias: base rate neglect people use base rates when it"s consistent with their theories. If descriptions are provided, base rates are ignored.
