Kahneman Unit 2 Glossary

Availability Cascade

Availability Cascade

A self-reinforcing process in which a minor event or belief gains more plausibility through repetition.

Probability Neglect

When an individual perceives the likelihood of a rare event to be more plausible and frequent than actuality.

Base Rate

Relative frequency or quantity of events or things required for judgment and decision making.

Representativeness Heuristic

Decision-making heuristic wherein one ignores the base rate and makes a decision based upon fit with prior stereotypes, schemas, or expectations.

Logic of Probability

Using the probability of an event happening, or being true, in judgments and decisions.

Conjunction Fallacy

The incorrect assumption that two events are more likely to occur in conjunction with one another than one simple event is.

Bayes's Rule

Determining the probability of an event based on prior knowledge of the conditions.

Causal Base Rates

Specific information related to an individual case that is often stereotyped, and can affect decisions.

Statistical Base Rates

Facts about a population that provide information about the general category, but aren't relevant to the individual case.

Stereotypes

An over-generalized and/or discriminatory belief about a particular category of people.

Regression to the Mean

The phenomenon that if a variable is extreme on its first measurement, it will tend to be closer to the average on its second measurement.

Correlation Coefficient

The statistical correlation between two variables, ranging from -1 (strong negative correlation) to +1 (strong positive correlation).

Intuitive Prediction

Non-regressive prediction that uses heuristics to substitute an easier question for whatever harder question was asked.

Baseline Prediction

A prediction made without knowing anything about the situation one is being asked to predict.

Narrative Fallacy

The tendency to create links between unrelated events; the tendency to create a story of events.

Pernicious Illusion

The illusion that we understand the past, which implies that we know the future, even though we don't understand the past as well as we believe.

Hindsight Bias

The difficulty to reconstruct past beliefs, resulting in underestimating the extent to which one was surprised by an event.

Illusion of Validity

Cognitive bias in which a person overestimates their ability to predict an unrelated outcome from a particular set of data.

Low-Validity Environments

Any domain with a significant degree of uncertainty or unpredictability.

Broken-Leg Rule

As long as the environment and circumstances are consistent, it's ideal to use an algorithm to determine probability.

Recognition-Primed Decision (RPD) Model

A decision-making process using associative memory to devise a rough plan (system 1), followed by mentally simulating the plan to ensure effectiveness (system 2).

Planning Fallacy

A phenomenon where predictions about how much time will be needed to complete a future task display an optimism bias and underestimate risks and required time.