On the Conjunction Fallacy in Probability Judgment: New Experimental Evidence
AbstractThis 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 Kahneman and Tversky (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.
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Bibliographic InfoPaper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt2dn4t727.
Date of creation: 11 Oct 2008
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Conjunction fallacy; representativeness bias; group consultation; incentives;
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