Adjustment &anchoring Heuristic 16.422 People start with an initial guess and adjust answers based on available information Problems Insufficient adjustment 1x2X3x4x5x6X7x8V. 8x7x6x5x4x3x2x1 ·512.2250.40320 Evaluation of simple, conjunctive(and)& disjunctive(or) events Overestimate conjunctive underestimate disjunctive Ordering matters Assessment of subjective probability distribution Overly narrow confidence intervals Simple- draw red from bag 50/50 red and white Conjunctive -draw seven successive reds from a bag 90/10 Disjunctive -draw a red at least once in seven tries from a bag 10/90 0/48522Adjustment &Anchoring Heuristic 16.422 • People start with an initial guess and adjust answers based on available information • Problems – Insufficient adjustment • 1x2x3x4x5x6x7x8 v. 8x7x6x5x4x3x2x1 • 512, 2250, 40320 – Evaluation of simple, conjunctive (and) & disjunctive (or) events • Overestimate conjunctive, underestimate disjunctive – Ordering matters – Assessment of subjective probability distribution • Overly narrow confidence intervals Simple – draw red from bag 50/50 red and white Conjunctive – draw seven successive reds from a bag 90/10 Disjunctive – draw a red at least once in seven tries from a bag 10/90 .50/.48/.522