Biased Probability Judgment: Representative Evidence for Pervasiveness and Economic Outcomes
AbstractMany economic decisions involve a substantial amount of uncertainty, andtherefore crucially depend on how individuals process probabilistic information. Inthis paper, we investigate the capability for probability judgment in a representativesample of the German population. Our results show that almost a third of therespondents exhibits systematically biased perceptions of probability. The findingsalso indicate that the observed biases are related to observed outcomes, whichindicates the policy relevance of our findings.
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Bibliographic InfoPaper provided by Maastricht : ROA, Research Centre for Education and the Labour Market in its series Research Memoranda with number 008.
Date of creation: 2008
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education; training and the labour market;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-14 (All new papers)
- NEP-CBE-2008-12-14 (Cognitive & Behavioural Economics)
- NEP-LAB-2008-12-14 (Labour Economics)
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