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On the Conjunction Fallacy in Probability Judgment: New Experimental Evidence
Gary Charness University of California, Santa Barbara - Department of Economics Edi Karni Johns Hopkins University - Department of Economics Dan Levin Ohio State University - Department of Economics July, 03 2008 Abstract: This paper reports the results of experiments designed to test whether and to what extent individuals succumb to the conjunction fallacy. Using the Kahneman and Tversky (1983) experimental design, we find that given mild incentives, the proportion of individuals who violate the conjunction principle is significantly lower than that reported by Kahneman and Tversky. Moreover, when subjects are allowed to consult with other subjects, these proportions fall dramatically, particularly when the size of the group rises from two to three. These findings cast serious doubts about the importance and robustness of such violations for the understanding of real-life economic decisions.
Keywords: Conjunction fallacy, representativeness bias, group consultation, incentives JEL Classifications: C91, C92, A12, B49 Working Paper SeriesDate posted: July 07, 2008 ; Last revised: July 07, 2008Suggested CitationContact Information
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