How to think rationally about the future

Cognitive biasThe arithmetic of reason

Concluding remarks

How to think rationally about the future

Paul Crowley and Roko Mijic

2010-07-03

Paul Crowley and Roko Mijic How to think rationally about the future


Concluding remarks

How to think rationally about the future

1 Cognitive bias

2 The arithmetic of reason

3 Concluding remarks



Concluding remarks

LessWrong.com

lesswrong.com

Eliezer Yudkowsky

Future of Humanity Institute



Concluding remarks

1982



Concluding remarks

The Second International Congress on Forecasting,

1982

First group

a complete suspension ofdiplomatic relations betweenthe USA and the SovietUnion, sometime in 1983

Second group

a Russian invasion ofPoland, and a completesuspension of diplomaticrelations between the USAand the Soviet Union,sometime in 1983

[Tversky and Kahneman, 1983]



Concluding remarks

The Second International Congress on Forecasting,

1982

First group

a complete suspension ofdiplomatic relations betweenthe USA and the SovietUnion, sometime in 1983

Second group

a Russian invasion ofPoland, and a completesuspension of diplomaticrelations between the USAand the Soviet Union,sometime in 1983




Concluding remarks

What is a cognitive bias?

A fallibility in human thought

Not random but directed

Revealed by experiment

Compared to a model of reason



Concluding remarks

The science of bias

Does this experiment measure what it’s trying tomeasure?

22 experiments in that one paper

1431 cites on Google Scholar

Example: intuitive likelihood vs probability



Concluding remarks

The science of bias







Concluding remarks

The science of bias







Concluding remarks

The science of bias







Concluding remarks

Which is the best bet?

Die has four green faces, two red faces

Rolled 20 times, a sequence of 20 Gs and Rs recorded

If your chosen sequence appears, you win $25

Which sequence will you choose?

Sequence 1

RGRRR

Sequence 2

GRGRRR

Sequence 3

GRRRRR[Tversky and Kahneman, 1983]



Concluding remarks

Anchoring bias

Anchor Medianestimate

10% 25%65% 45%




Concluding remarks

Scope neglect

Flight terrorism, Thailand to US leg $17.19Flight terrorism, round trip $13.90Terrorism, flight and ground $7.44

[Johnson et al., 1993]



Concluding remarks

Scope neglect - one child or eight?

One identified child 10.71Eight identified children 5.03

[Kogut and Ritov, 2005]



Concluding remarks

Biased assimilation

[Lord et al., 1979]Paul Crowley and Roko Mijic How to think rationally about the future


Concluding remarks

Biased assimilation

Ficticious research A

Kroner and Phillips (1977)compared murder rates forthe year before and the yearafter adoption of capitalpunishment in 14 states. In11 of the 14 states, murderrates were lower afteradoption of the deathpenalty. This researchsupports the deterrenteffect of the deathpenalty.

Ficticious research B

Palmer and Crandall (1977)compared murder rates in 10pairs of neighbouring stateswith different capitalpunishment laws. In 8 of the10 states, murder rates werehigher in the state withcapital punishment. Thisresearch opposes thedeterrent effect of thedeath penalty.



Concluding remarks

Biased assimilation

Ficticious research C

Kroner and Phillips (1977)compared murder rates forthe year before and the yearafter adoption of capitalpunishment in 14 states. In11 of the 14 states, murderrates were higher afteradoption of the deathpenalty. This researchopposes the deterrenteffect of the deathpenalty.

Ficticious research D

Palmer and Crandall (1977)compared murder rates in 10pairs of neighbouring stateswith different capitalpunishment laws. In 8 of the10 states, murder rates werelower in the state withcapital punishment. Thisresearch supports thedeterrent effect of thedeath penalty.



Concluding remarks

Reason is a kludge

Wikipedia: 150 articles

Confirmation bias

Hindsight effect

Illusory correlation

Overconfidence effect

Choice-supportive bias

Zero-risk bias

Bystander effect

Illusory superiority

...[Mercier and Sperber, 2010]



Concluding remarks

Arithmetic is the straight edge



Concluding remarks

Probability

0% 100%

50%17% 40%



Concluding remarks

Probability

0% 100%50%

17% 40%



Concluding remarks

Probability

0% 100%50%17%

40%



Concluding remarks

Probability

0% 100%50%17% 40%



Concluding remarks

Cox’s theorem

l(¬A) = f (l(A))

l(A ∧ B) = g(l(A), l(B |A))

...



Concluding remarks

Bayes Theorem

20% of the population have the disease

The test is 80% accurate

If you test positive, what’s the probability you have thedisease?



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Bayes theorem

16%

16%



Concluding remarks

Other tools

Solomonoff induction

Von Neumann–Morgenstern utility theorem

Economics

Game theory

Picoeconomics

...



Concluding remarks

Knowing about cognitive biases can harm you

Motivated skepticism again

but armed with new tools

Let the winds of evidence blow you about as thoughyou are a leaf, with no direction of your own.

[Yudkowsky, 2006]



Concluding remarks

Conclusion

Cognitive psychology

Probability theory, decision theory, economics

Quantitative thinking

Straightening the crooked timber of our reason


Bibliography

Bibliography I

Johnson, E. J., Hershey, J., Meszaros, J., and Kunreuther,H. (1993).Framing, probability distortions, and insurance decisions.Journal of Risk and Uncertainty, 7(1):35–51.

Kogut, T. and Ritov, I. (2005).The singularity effect of identified victims in separate andjoint evaluations.Organizational Behavior and Human Decision Processes,97(2):106–116.


Bibliography

Bibliography II

Lord, C. G., Ross, L., and Lepper, M. R. (1979).Biased assimilation and attitude polarization: The effectsof prior theories on subsequently considered evidence.Journal of Personality and Social Psychology,37(11):2098–2109.

Mercier, H. and Sperber, D. (2010).Why do humans reason? Arguments for an argumentativetheory.

Tversky, A. and Kahneman, D. (1974).Judgment under uncertainty: Heuristics and biases.Science, 185(4157):1124–1131.


Bibliography

Bibliography III

Tversky, A. and Kahneman, D. (1983).Extensional versus intuitive reasoning: The conjunctionfallacy in probability judgment.Psychological Review, 90(4):293–315.

Yudkowsky, E. S. (2006).Twelve virtues of rationality.


Documents

How to think rationally about the future