# Heuristics and Biases

## Psychology as constructing abstractions of human mind

### Subconscious vs. conscious processes

Subconscious process is fast, active, effortless but not logical; conscious process is slow, lazy, effortful but can be logical

Limitations when subconsciousness takes control; and results from bounded rationality. Heuristics to avoid costly mistakes under complex circumstances that requires fast resolution

## Four fundamental limits

### Reluctant to accept randomness

``A study of the incidence of kidney cancer in the 3,141 counties of the US reveals a remarkable pattern. The counties in which the incidence rate is lowest are mostly rural, sparsely populated, and located in tradiHonally Republican states in the Midwest, the South, and the West. What do you make of this?''

#### Hasty generalization

Insensitivity to sample size: ``Law of small numbers'' according to Daniel Kahneman: ``the law of large numbers applies to small numbers as well''

Coin tossing: if you have seen 0101010, will the next toss more likely to produce 1 or 0?

Tool X worked great in Projects A and B, should we use it in Project C?

There are no bugs in the three modules we have examined. Maybe the code is so good that there is no bug at all?

#### See pattern from random data

Pareidolia, Apophenia, and clustering illusion

How did it help survival?: False negative in recognizing a prey costs much more than a false positive.

#### Overanalyze success or failure

All the books written about Steve Jobs, Elon Musk, Bill Gates. All the pundits talks about the great/disastrous performance of a football team

Also related availability

If a presidential candidate did great in one debate, she is more likely to disappoint in the next. People raise expectation by overanalyzing her success.

#### Illusion of control

All starup founders believe they can beat the well-known, extremely low odds of success.

#### Seeking meaning/intention from random data

Fortune tellling is an example people try to make sense of random events.

We like conspiracy theories, trying to put an evil attention behind random events

Hanlon's Razor: ``never assume bad intentions when assuming stupidity is enough''

##### How was a prophet born?

256 villagers in a valley.

• Everyone makes a completely random prediction if there will be flood every year (50% vs. 50%)
• Assume flood or not is completely random (50% vs. 50%)

What is the probability that at least one villager makes N consecutive predictions?

• Probability of a villager making N correct predictions: 1/2^N
• Probability of no villager making N correct predictions: (1-1/2^N)^256
• Probability of at least one villager making N correct predictidons: P= 1-(1-1/2^N)^256
• P=0.9997 when N=5
• P=0.6328 when N=8

#### Why have we evolved this limit?

• Rapid response to threats: tiger hiding in the grass?
• Peaceful mind
• coordination of large groups: value of ideolgy

### Incapable of probability

Result in Pseudocertainty_effect

We are not good at rational assessment with probability considered--->Back the envelope calculation

Zero-risk bias: People are willing to pay more to eliminate a category of risk than to reduce risk more overall.

people are willing to pay more than mathematically justified for really small odds: lottery,

#### Representativeness heuristic

If we observe H, is it A or B?

• H: certain property
• A, B: classifications

Bayesian classification (minimum error rate): It is A if P(A|H)>P(B|H)

As we are incapable of Bayesian, we approximate P(A|H) with P(H|A): If the probability of a member of A showing H is higher than that of B, we conclude it is A when we observe H. We don't bother with P(A|H)=P(H|A)*P(A)/P(H) by ignoring P(A).

There are two reasons: (1) incapable of probablity and (2) availability of data.

Examples: Rhyme-as-reason effect; Judge a book by its cover

#### Why have we evolved this limit?

The root of this limit is in our short-term memory and conscious system. The benefits of the heuristics include

• Rapid response to threats: All coral snakes, which are venmous, have colorful rings; therefore we avoid all snakes with colorful rings
• Encourage risk-taking, adventure, and innovation.

### Uncomfortable with conflict: Confirmation bias

Collect, remember, and interpret information according to one's belief. (Why certain people favor certain TV channels). Theory explaining confirmation bias: minimize cognitive dissonance. Conlicts affect the coherence of our identity and ability to work with others.

Conflict with one's belief can have three dimensions: (1) when the conflict happens: collection, recall, or interpretation of data; (2) the time scale of the belief: transient vs. long-lasting; (3) what is conflicting with the belief: facts, one's belief from the past, other people's belief.

#### Optimism (Overconfidence)

We create a belief when we really want something to happen. We ignore data that points to that it may not happen

Quote from MMM: ``All programmers are optimists. Perhaps this modern sorcery especially attracts those who believe in happy endings and fairy god- mothers. Perhaps the hundreds of nitty frustrations drive away all but those who habitually focus on the end goal. Perhaps it is merely that computers are young, programmers are younger, and the young are always optimists. But however the selection process works, the result is indisputable: `This time it will surely run,' or `I just found the last bug.' ''

Why so true for software developers?: Overconfidence usually happens when people perceive the task is easy (Recall what we talked about the unique complexities of software systems early on) and perceive themselves as capable (Lake Wobegon Effect).

Planning fallacy. Recall Brooks's Law: adding manpower to a late project only makes it later.

Incompetence to realize one's incompetence: Dunning-Kruger effect

#### You get what you are expecting

We create a belief even when we hypothesize something may happen. We ignore data that points to that it may not happen

A common source for Experimenter's bias (Not all experimenter's bias caused by confirmation bias).

#### Micro-belief

We create tiny, transient beliefs constantly as we receive information. Such micro-beliefs can affect how we make a decision.

When given a hypothesis, one is likely to search for evidence that supports it first--->Tend to give affirmative answer to question--->Survey questions regarding subtle issue can be biased

Information appeared early creates a micro-belief that affects processing of subsequent information--->Think about how to be positive about a person, product, or paper)--->Anchoring

Causes: availability bias (a limit of long-term memory); serial nature of reasoning (a limit of short-term memory)

#### Avoid conflict with your own past

When recollecting memory, (1) only recall things one likes to remember and (2) modify it as one desires. Recall that for long-term memory, we synthesize details!!!

#### Avoid conflict with others

False consensus effect

#### Why have we evolved this limit?

• In the harsh savanna time, our ancestors had to be (unreasonably) optimistic to survive
• Peaceful mind
• Coordination of large groups: ideology. Confirmation bias makes people prone to ideology

### Availability

#### Availability heuristic

We make quick decisions/judgements based on information readily available, without seeking out more information. The more readily available, the more influential the information is on our decision.

When there is a dearth of information, any information, even a little bit, becomes critical in our decision making, often in the misleading way.

• What information is available is highly dependent on the personal experience.
• What information is available can be manipulated, by manipulating the personal experience. See the movie Focus.
• How the information is interpreted (or incorporated in a plausible story) is highly dependent on the personal experience.

There is a lot of mental processes out of our control (conscious control).

• We can control what to place in the memory, what to think consciously (pay attention).
• We cannot control what not to place in the memory, what not to think about. (Try not to think about a white bear for 30 seconds.)

The world shapes our mind not only at any moment but also accumulatively.

• Content of Long-term memory: (1) remember the gist; (2) synthesize the details; (3) believe them. The synthesis is guided by past experience.
• Organization of long-term memory: constantly reshaped by experience. A stimulus can lead to an reorganization: refresh the memory, recall things.
• The recall process reorganizes the memory too. More frequently, recently recalled items become more available.

#### Familiarity heuristic

We often mistake familiarity for quality, safety, appeal. An important source of stereotype.

The heuristic may help our ancestors survive: familiarity without harm, e.g., frequent encounters with a certain animal/tribe and frequent consumption of certain food, means safety.

#### Interplay of availability and other limitations

Availability+ conflict avoidance: Misguided survey questions: Is the President doing a fantastic job? Is the President doing a good job? How is the president doing her job?

Availability + Conflict avoidance: Extreme opinions. we make confirming information more available by ignoring contradicting information. (Republicans like to watch Fox News while Democrats CNN)

Availability + Reluctance to accept randomness: conspiracy theories, books analyzing the success of Steve Jobs, political pundits explaining presidential debate performance

Availability+Incapable of probability: forget to ask for base rate