The bounded rationality of probability distortion.

ABSTRACT: In decision making under risk (DMR) participants' choices are based on probability values systematically different from those that are objectively correct. Similar systematic distortions are found in tasks involving relative frequency judgments (JRF). These distortions limit performance in a wide variety of tasks and an evident question is, Why do we systematically fail in our use of probability and relative frequency information? We propose a bounded log-odds model (BLO) of probability and relative frequency distortion based on three assumptions: 1) log-odds: probability and relative frequency are mapped to an internal log-odds scale, 2) boundedness: the range of representations of probability and relative frequency are bounded and the bounds change dynamically with task, and 3) variance

SUBMITTER: Zhang H 

PROVIDER: S-EPMC7486738 | biostudies-literature | 2020 Sep

REPOSITORIES: biostudies-literature