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A Computational Theory of Subjective Probability : [Featuring a Proof that the Conjunction Effect is not a Fallacy]

Maguire, Phil, Moser, Philippe, Maguire, Rebecca and Keane, Mark (2013) A Computational Theory of Subjective Probability : [Featuring a Proof that the Conjunction Effect is not a Fallacy]. In: Proceedings of the Proceedings of the Thirty-Fifth Annual Conference of the Cognitive Science Society. Cognitive Science Society, Austin, TX, pp. 960-965. ISBN 9780976831891

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Abstract

In this article we demonstrate how algorithmic probability theory is applied to situations that involve uncertainty. When people are unsure of their model of reality, then the outcome they observe will cause them to update their beliefs. We argue that classical probability cannot be applied in such cases, and that subjective probability must instead be used. In Experiment 1 we show that, when judging the probability of lottery number sequences, people apply subjective rather than classical probability. In Experiment 2 we examine the conjunction fallacy and demonstrate that the materials used by Tverksy and Kahneman (1983) involve model uncertainty. We then provide a formal mathematical proof that, for every uncertain model, there exists a conjunction of outcomes which is more subjectively probable than either of its constituents in isolation.

Item Type: Book Section
Subjects: Q Science > QA Mathematics > Probabilities
Divisions: School of Business > Staff Research and Publications
Related URLs:
Depositing User: CAOIMHE NI MHAICIN
Date Deposited: 13 May 2014 13:20
Last Modified: 13 May 2014 13:20
URI: http://trap.ncirl.ie/id/eprint/1220

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