The Cognition and Decision Seminar Series presents The Bayesian Sampler: Generic Bayesian Inference Causes Incoherence in Human Probability Judgments Dr. Adam Sanborn University of Warwick Human probability judgments are systematically biased, in apparent tension with Bayesian models of cognition. But perhaps the brain does not represent probabilities explicitly, but approximates probabilistic calculations through a process of sampling, as used in computational probabilistic models in statistics. Naïve probability estimates can be obtained by calculating the relative frequency of an event…
Find out more »The Cognition and Decision Seminar Series presents The Strategic Brain under Risk in Games and Lotteries with FMRI Rosemarie Nagel Universitat Pompeu Fabra While the neuroeconomics of individual decision making has been extensively studied, the neuroeconomics of strategic interaction remains relatively unexplored. I will begin by introducing three classic strategic situations, the Beauty Contest, Stag Hunt, and Entry games, to illustrate the general structure of simple strategic interaction situations, and some basic principles of game theory. The predictions of…
Find out more »The Cognition and Decision Seminar Series presents Memory and Representativeness Andrei Shleifer Harvard University We explore the idea that judgment by representativeness reflects the workings of episodic memory, especially interference. In a new laboratory experiment on cued recall, participants are shown two groups of images with different distributions of colors. We find that i) decreasing the frequency of a given color in one group significantly increases the recalled frequency of that color in the other group, ii) for a…
Find out more »In the past decade, researchers in psychology and neuroscience studying human decision-making have increasingly adopted a framework that combines two systems, namely “model-free” and “model-based” learning. We import this framework into a simple financial setting, study its properties, and link it to a range of applications. We show that it provides a foundation for extrapolative demand and experience effects; resolves a puzzling disconnect between investor allocations and beliefs in both the frequency domain and the cross-section; helps explain the dispersion…
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