In response to Conjunction Fallacy
Comment author: karl12 18 May 2016 07:51:13PM *  1 point [-]

I find EY’s main points very convincing and helpful. After reading this and the follow-on thread, my only nit is that using the suspension-of-relations question as one of the examples seems pedagogically odd, because perfectly rational (OK, bounded-rational but still rational) behavior could have led to the observed results in that case.

The rational behavior that could have led to the observed results is that participants in the second group, having been reminded of the “invade Poland” scenario, naturally thought more carefully about the likelihood of such an invasion (and/or the likelihood of such an invasion triggering suspension), and this more careful thinking caused them to assign a higher probability to the invasion-then-suspension scenario (thus also to the invasion-and-suspension scenario) than they would have assigned to the “suspension” scenario if instead asked Question 1 (which mentions only suspension).

Why? For the simple reason that Question 2 tended to provide them with new information (namely, the upshot of the additional careful thought about the Polish invasion scenario) that Question 1 wouldn’t have.

(To caricature this, imagine showing two separate groups of chess beginners the same superficially-even board position with Player A on move, asking Group 1 participants “what’s the probability that A will win,” and separately asking Group 2 participants “what’s the probability that A will make slightly-tricky-advantageous-move-X and win”? Yes, the event Group 2 was asked about is less likely than the event Group 1 was asked about; Group 2's answers may nevertheless average higher for quite rational reasons.)

In response to comment by karl12 on Conjunction Fallacy
Comment author: WressLong 24 May 2016 10:15:08PM 0 points [-]

I agree. This notion of question 2 providing a plausible cause that might lead to suspension v. question 1 where the test subject has to conceive of their own cause is a bias, but a different type of bias, not a conjunction fallacy. There could be (and possibly have been) ways to construct the test to control for this. For example, there are 3 test groups where 1 and 2 are the same and for the third, the two events are asked independently: What are the probabilities of each event:

A. That USSR invades Poland, or B. That US suspends relations

In response to Conjunction Fallacy
Comment author: Sonder_Wand 12 April 2015 04:19:53AM 0 points [-]

Is this really a fallacy? In the USSR and Poland case, we might take the probability space in (1) to exclude an invasion of Poland, and the space in (2) to include one. Then the claims are perfectly consistent, since the probability space changes; people just reason with respect to "stereotypical" alternatives.

Comment author: WressLong 24 May 2016 10:11:02PM 0 points [-]

I believe this is not a conjunction fallacy, but for a different reason. In the first case, the test subject is required to conceive of a reason that might lead to a complete suspension of relations. There are many different choices, invasion, provocation, oil embargo of Europe, etc. Each of these seems remote, that the test subject might not even contemplate them. In the second case, the test is given a more specific, therefore more conceivable sequence of events.

A good third scenario, to control for this, would have been to ask another group of subjects the probabilities independently:
A. That USSR invades Poland B. That US suspends relations

This provide the same trigger of a plausible provocation, but doesn't directly link them. Variances between the estimates of B in this case v. 1 in the original test would indicate confidence interval between variances between 1 and 2.

Comment author: WressLong 24 May 2016 09:08:22PM 0 points [-]

You describe the millionaire daydream as a sink. That could be reframed as an opportunity cost. The same as any short-term v. long-term gratification, the time spent daydreaming may create an opportunity cost wherein the preoccupied brain isn't investing in some other opportunity that could lead to higher returns in the future, such as your technical school example. This simply restates that the costs of the lottery ticket are the lost marginal utility of the dollar which could have been spent on, or invested in something else, plus the opportunity cost of the lost time spent daydreaming that could have been spent on something else. The benefits are the marginal utility derived from the time spend daydreaming.

In that regard, it still seems that the purchase may be good for some, if they can afford the dollar, they enjoy the daydreaming, and the determine that the opportunity cost is low. It all seems to hinge on the individuals utility functions for the dollar, the daydream, that the expected future value of the rewards associated with the alternative time lost to daydreaming.