We believe cognitive biases and susceptibility lead to bad decisions and suboptimal performance. I’d like to look at 2 interesting studies:

Parker & Fischhoff 2005: “Decision-making competence: External validation through an individual-differences approach”
compiled a number of questions for 7 cognitive biases and then asked questions about impulsiveness, number of sexual partners, etc to their 110 18–19 year olds, who also supplied some IQ, education, and thinking style metrics. The components for their ‘DMC’ battery:
- Consistency in risk perception
- Recognizing social norms
- Resistance to sunk costs
- Resistance to framing
- Applying decision rules
- Path independence
- Under/overconfidence
Bruine de Bruin et al 2007: “Individual Differences in Adult Decision-Making Competence”
They used the DMC as well, but also developed what we might call a 34-item index of bad decisions (the DOI): ever bought clothes you never wore, rented a movie you didn’t watch, get expelled, file for bankruptcy, forfeit your driver’s license, miss an airplane, bounced a check, drink until you vomited, etc. (pg 18–19 full list). The subjects were 360 18–88 year olds (average 48), with many of the same metrics gathered (education/IQ/thinking style).

Before continuing further, it might be interesting to write down what you expect the results to be. Controlling for IQ eliminates all interesting correlations? A few of the fallacies correlated, or all, or none? Education increases, decreases, or doesn’t affect susceptibility? Fallacy susceptibility correlates strongly with risky behavior, >0.5? Correlates strongly with the DOI results, >0.5? Less for either? And so on.

Are we done? Good, but first I’d like to discuss why I was reading these papers: I recently received my copy of Keith Stanovich’s 2010 book, Rationality & The Reflective Mind. (It cost a cool $50 because I couldn’t find anyone who would pirate the ebook version from Oxford Scholarship Online. So it goes.) It’s fairly interesting - I’m going to have to edit my DNB FAQ based on chapter 3 - and presents a two-process model of IQ and rationality, arguing that lack of reflection or meta-cognition explains why IQ tests can accurately measure IQ but still fail to correlate as much as one would expect with performanc...

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