On the Conjunction Fallacy in Probability Judgment: New Experimental Evidence

18 Pages Posted: 7 Jul 2008

See all articles by Gary Charness

Gary Charness

University of California, Santa Barbara (UCSB) - Department of Economics

Edi Karni

Johns Hopkins University - Department of Economics

Dan Levin

Ohio State University (OSU) - Economics

Date Written: July 3, 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 Classification: C91, C92, A12, B49

Suggested Citation

Charness, Gary and Karni, Edi and Levin, Dan, On the Conjunction Fallacy in Probability Judgment: New Experimental Evidence (July 3, 2008). Available at SSRN: https://ssrn.com/abstract=1155219 or http://dx.doi.org/10.2139/ssrn.1155219

Gary Charness (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States
805-893-2412 (Phone)
805-893-8830 (Fax)

Edi Karni

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States
410-516-7608 (Phone)
410-516-7600 (Fax)

Dan Levin

Ohio State University (OSU) - Economics ( email )

1945 N. High Street
Columbus, OH 43210-1172
United States

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