What Comes to Mind
Nicola Gennaioli,Andrei Shleifer +1 more
TLDR
A model of judgment under uncertainty is presented, in which an agent combines data received from the external world with information retrieved from memory to evaluate a hypothesis, which can account for some of the evidence on heuristics and biases presented by Kahneman and Tversky.Abstract:
We present a model of intuitive inference, called “local thinking,” in which an agent combines data received from the external world with information retrieved from memory to evaluate a hypothesis. In this model, selected and limited recall of information follows a version of the respresentativeness heuristic. The model can account for some of the evidence on judgment biases, including conjunction and disjunction fallacies, but also for several anomalies related to demand for insurance.read more
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Salience Theory of Choice Under Risk
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Proximity and Investment: Evidence from Plant-Level Data*
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References
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Book
Judgment Under Uncertainty: Heuristics and Biases
Amos Tversky,Daniel Kahneman +1 more
TL;DR: The authors described three heuristics that are employed in making judgements under uncertainty: representativeness, availability of instances or scenarios, and adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
Journal Article
Judgement under Uncertainty: Heuristics and Biases
Journal ArticleDOI
Maps of Bounded Rationality: Psychology for Behavioral Economics
TL;DR: Kahneman as mentioned in this paper made a statement based on worked out together with Shane Federik the quirkiness of human judgment, which was later used in his speech at the Nobel Prize in economics.
Journal ArticleDOI
Subjective Probability: A Judgment of Representativeness
Daniel Kahneman,Amos Tversky +1 more
TL;DR: In this paper, the subjective probability of an event, or a sample, is determined by the degree to which it is similar in essential characteristics to its parent population and reflects the salient features of the process by which it was generated.
ReportDOI
A model of investor sentiment
TL;DR: The authors presented a parsimonious model of investor sentiment, or of how investors form beliefs, based on psychological evidence and produces both underreaction and overreaction for a wide range of parameter values.