Deck 16: Psychological Influences on Personal Probability

Question 1

Suppose you are told that 70% of the people in a certain population are Democrats.The 70% is an example of a(n) __________ rate.It is important to keep this number in mind when you are asked to make assessments about the individuals in the population.

Answer 1

base

Question 2

Name two ways in which perceptions of risk can be influenced by the reference points used.

Answer 2

any two of the following are ok:
1) the availability HEURISTIC
2) detailed imagination
3) anchoring
4) the representativeness heuristic
5) conjunction fallacy
6) forgotten base rates.

Question 3

Which of the following statements is true about personal probabilities?

A)They are used in situations where no physical assumptions can be used to calculate potential relative frequencies.
B)They do not have a single correct value.
C)They must follow the rules of probability.
D)All of the above.

Answer 3

All of the above.

Question 4

Explain how anchoring can severely distort someone's risk perception.

Question 5

Which of the following describes the certainty effect?

A)People are more willing to pay to reduce their risk from 10% down to zero than they are to reduce their risk from 50% down to 40%.
B)People are more willing to pay for a warranty plan that completely covers 30% of the possible problems rather than a plan that covers all problems with 30% probability.
C)People are more willing to take a vaccine that has 100% protection for one strain of a disease and 0% protection for another strain of the disease, than a vaccine that offers 50% protection for both strains of the disease.
D)All of the above.

Question 6

Which of the following describes the representativeness heuristic?

A)Events or scenarios with more detailed descriptions are perceived to be more likely than events or scenarios with very general descriptions.
B)The expected value for a situation does not represent an actual possible outcome.
C)People think that the outcome with the highest probability is representative of what is going to happen.
D)All of the above.

Question 7

Suppose a sales brochure tries to talk you into joining an auto club by telling you to "...picture a situation where you are alone on a country road at night in the dark and your lights go out - where will you turn for help?" How does this distort your perception of risk?

Question 8

What type of psychological effect is reflected in the statement: "People like a sure thing"?

Question 9

Which of the following is an example of the availability heuristic?

A)Thinking that you won't get lung cancer if you smoke because you know many smokers and none of them have lung cancer.
B)Deciding not to buy a certain brand of computer because you know one person who had a bad experience with that brand.
C)Believing that homicides occur more frequently than deaths due to diabetes because homicides get more attention by the media when they occur.
D)All of the above are examples of the availability heuristic.

Question 10

Which of the following statements is not true regarding personal probabilities?

A)They often take relative frequencies of similar events into account.
B)They are based on unique situations that are not likely to be repeated.
C)We could each assign a different personal probability to the same event.
D)All of the above are true statements regarding personal probabilities.

Question 11

Which of the following warranty plans has a higher expected value for the customer? Plan A covers all possible problems with 30% probability; Plan B completely covers 30% of the possible problems, and offers no coverage on the remaining 70% of the problems.(Assume the individual payout is about the same on average for each of the problems covered in Plan B compared to those not covered.)

A)Plan A has a higher expected value for the customer.
B)Plan B has a higher expected value for the customer.
C)Plans A and B have the same expected value for the customer.
D)Not enough information to tell.

Question 12

Is it possible for the majority of people in the general population to be better than average drivers? Most people perceive themselves to be.Explain your answer, including which psychological factor is at work here.

Question 13

Explain why it is important to check the length of an extended warranty carefully before deciding how much (and if) you are willing to pay for it.

Question 14

Give two examples of personal probabilities that are incoherent (with respect to each other).

Question 15

Explain how the pseudocertainty effect can adversely affect decision-making.

Question 16

Which of the following is an example of the conjunction fallacy?

A)The probability of two events occurring together is thought to be higher than the probability of either event occurring alone.
B)Two events happening in conjunction is thought to be impossible if they are mutually exclusive.
C)A rare event is perceived to have a higher chance of happening to someone if the event is good (say winning the Powerball Lottery) vs.a rare event that is not good (say getting struck by lightening).
D)None of the above.

Question 17

People generally perceive a scenario offering a complete elimination of risk for one subset of problems (and no reduction in risk for the others) much more favorably than a scenario offering the same (but not complete) reduction in risk for all problems.This is an example of what psychological effect?

Question 18

If a person assesses the probability of an event by the ease with which instances or occurrences can be brought to mind, they are applying the __________heuristic.

Question 19

Research on college students confirms that they see themselves as less likely than average to encounter negative life events.What is the problem with having a tendency to underestimate one's probability of negative life events?

Question 20

Which of the following describes the pseudocertainty effect?

A)People are more willing to pay to reduce their risk from 10% down to zero than they are to reduce their risk from 50% down to 40%.
B)People are more willing to pay for a warranty plan that completely covers 30% of the possible problems rather than a plan that covers all problems with 30% probability.
C)Rather than being offered a complete reduction of risk on certain problems and no reduction on others, you are offered a reduced risk on a variety of problems.
D)All of the above.

Question 21

Which group is better calibrated as a whole, physicians or weather forecasters, according to research?

A)Physicians
B)Weather forecasters
C)Neither; they are both very badly calibrated
D)They are both about the same

Question 22

Which of the following represents a way that you could be misled by someone's personal probability?

A)A doctor overestimates your chances of having a certain disease.
B)A prosecutor gives the jury highly detailed scenarios of how/why the defendant "did it."
C)A salesman tries to get you to buy a $200 extended warranty on a video recorder by telling you about a customer who didn't get the extended warranty, and the day after the regular warranty ended, their recorder's motor mechanism broke, costing more to fix than to just buy a new one.
D)All of the above.

Question 23

Which of the following statements is true?

A)Excess detail decreases the actual probability that something is true, yet it increases people's perception of it being true, in many cases.
B)The chance of getting injured in a car accident on a particular trip (1 in 100,000) is about the same as the chance of getting injured in a car accident sometime during your life.
C)The percent drop in the death rate is a more appropriate measure of change in death rate than the drop in the number of deaths per 100,000 people when you are trying to use the results of a study to make a lifestyle decision.
D)All of the above statements are true.

Question 24

Suppose you ask your doctor what your chances are of having complications from the surgery you are about to undergo, and she tells you the chances are less than 5%.Which of the following means of her obtaining this probability would you have more faith in?

A)She gave a personal probability based on her own experience.
B)She is quoting the relative frequency of complications based on many individuals undergoing the same type of surgery.
C)Both a) and b) would be equally valid.
D)None of the above.

Question 25

Which of the following is an example of conservatism?

A)The reluctance to change personal probabilities in the face of new data.
B)The reluctance of the scientific community to accept new paradigms or to examine compelling evidence for phenomena such as ESP.
C)Observations not confirming the current belief system tend to be ignored or dismissed more readily.
D)All of the above.

Question 26

Research shows that physicians are not well calibrated in terms of assessing personal probability.Physicians tend to overestimate the probability of disease, especially when the baseline risk is low.Why might this be?

Question 27

Which of the following applies to the problem of overconfidence in personal probability assessment?

A)Research shows that the more confident people are that they are right, the more the true proportion of correct answers falls below the perceived probability of being right.
B)One way to help eliminate overconfidence is to get people to consider reasons why they might be wrong.
C)When people venture a guess about something for which they are uncertain, they tend to overestimate the probability that they are correct.
D)All of the above.

Question 28

Give two tips for improving someone's personal probabilities and judgments.

Question 29

The first step in making a decision based on a probability you are given is to make sure the probability is not distorted.Explain why this is such an important step.

Question 30

Each day a weather forecaster gives a certain prediction of rain.How can you use these predictions to see if his/her probabilities are well calibrated? Assume you have the following data recorded for each day: what chance of rain was forecasted, and whether or not it actually rained that day.