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The Sensitivity of Probability Assessments to Time Units and Performer Characteristics

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  • Eldad Yechiam

    (Max Wertheimer Minerva Center for Cognitive Studies, Faculty of Industrial Engineering and Management, Technion---Israel Institute of Technology, Haifa 32000, Israel)

  • David V. Budescu

    (Department of Psychology, University of Illinois at Urbana-Champaign, 603 E. Daniel Street, Champaign, Illinois 61820)

Abstract

This paper examines the sensitivity of probability judgments pertaining to real-world events (e.g., the chance of getting a speeding ticket) to the events’ time horizon (e.g., 1, 2, or 8 weeks) and performer characteristics (e.g., 1, 2, and 8 drivers). Using the participants’ multiple responses to different time horizons and number of performers, we assessed the degree of deviance from the normative prescription and potential explanations for such deviance. In Study 1, two questionnaires were administered to a sample of 120 students. In the first questionnaire, in violation of the normative disjunctive model, most participants did not adjust probabilities sufficiently for various time horizons. This pattern cannot be attributed merely to regression to the mean with a fixed error term (Erev et al. 1994). In the second questionnaire, the same bias was replicated in scenarios featuring different numbers of individuals, indicating no time-specific contributing factors. In Study 2, a sample of 140 students responded to a computerized questionnaire in which the items preceding target questions were controlled. The direction of the deviance did not change as a function of previous items. The results are attributed to the “extension neglect” tendency (Kahneman 2003).

Suggested Citation

  • Eldad Yechiam & David V. Budescu, 2006. "The Sensitivity of Probability Assessments to Time Units and Performer Characteristics," Decision Analysis, INFORMS, vol. 3(3), pages 177-193, September.
  • Handle: RePEc:inm:ordeca:v:3:y:2006:i:3:p:177-193
    DOI: 10.1287/deca.1060.0067
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    References listed on IDEAS

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    4. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    5. Jeryl L. Mumpower & Gary McClelland, 2002. "Measurement Error, Skewness, and Risk Analysis: Coping with the Long Tail of the Distribution," Risk Analysis, John Wiley & Sons, vol. 22(2), pages 277-290, April.
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    Citations

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    Cited by:

    1. L. Robin Keller & Ali Abbas & Manel Baucells & Vicki M. Bier & David Budescu & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Ahti Salo & George Wu, 2010. "From the Editors..," Decision Analysis, INFORMS, vol. 7(4), pages 327-330, December.
      • L. Robin Keller & Manel Baucells & Kevin F. McCardle & Gregory S. Parnell & Ahti Salo, 2007. "From the Editors..," Decision Analysis, INFORMS, vol. 4(4), pages 173-175, December.
      • L. Robin Keller & Manel Baucells & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Gregory S. Parnell & Ahti Salo, 2008. "From the Editors..," Decision Analysis, INFORMS, vol. 5(4), pages 173-176, December.
      • L. Robin Keller & Manel Baucells & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Gregory S. Parnell & Ahti Salo, 2009. "From the Editors ..," Decision Analysis, INFORMS, vol. 6(4), pages 199-201, December.
    2. Yuyu Fan & David V. Budescu & David Mandel & Mark Himmelstein, 2019. "Improving Accuracy by Coherence Weighting of Direct and Ratio Probability Judgments," Decision Analysis, INFORMS, vol. 16(3), pages 197-217, September.
    3. Yechiam, Eldad & Busemeyer, Jerome R., 2008. "Evaluating generalizability and parameter consistency in learning models," Games and Economic Behavior, Elsevier, vol. 63(1), pages 370-394, May.

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