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Unnamed comments on Prospect Theory: A Framework for Understanding Cognitive Biases - Less Wrong

66 Post author: Yvain 10 July 2011 05:20AM

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Comment author: Unnamed 11 July 2011 02:48:28AM *  3 points [-]

It may not be an official bias, but the "but there's still a chance, right" outlook looks a lot like the sharply rising curve of the subjective probability function near zero.

(RETRACTED) This is an official bias, known as the certainty effect. (/RETRACTED)

EDIT (thanks, Vaniver): This is closely related to the certainty effect, which describes the sharp change in weighting near p=1 when an outcome switches from a sure thing to merely a likely possibility. The sharp change in weighting near p=0 is similar, as an outcome switches from an impossibility to merely an unlikely possibility, but I don't think it has a handy name.

Comment author: Vaniver 11 July 2011 04:48:16AM 2 points [-]

That looks like something else, actually- that's the sharply falling weight near 1, as uncertain things aren't as valuable as certain things. Yvain is discussing when people model a tiny chance of winning as much larger- as vividly displayed by the lottery, for example.

Comment author: Unnamed 11 July 2011 06:09:10AM *  0 points [-]

You're right; comment retracted/edited. I'd thought that it referred to the sharp changes in weight near 1 and 0, but a little bit of googling confirms that the term is only applied to the change near 1.