We have a fairly good idea of how people weight decisions based on probabilities via offering different bets and seeing which ones get chosen.
I don’t know how much quantification has been done on incorrect Bayesian updates. Could one suggest trades where one is given options one of which has been recommended by an “expert” who has made the correct prediction to a 50:50 question on a related topic x times in a row. How much do people adjust based on the evidence of the expert? This doesn’t sound perfect to me, maybe someone else has a better version or maybe people are already doing this research?!
Get a pack of cards in which some cards are blue on both sides, and some are red on one side and blue on the other. Pick a random card from the pile. If the subject is shown one side of the card, and its blue, they gain a bit of evidence that the card is blue on both sides. Give them the option to bet on the colour of the other side of the card, before and after they see the first side. Invert the prospect theory curve to get from implicit probability to betting behaviour. The people should perform a larger update in log odds when the pack is mostly one type of card, over when the pack is 50 : 50.
I like the theory. How would we test it?
We have a fairly good idea of how people weight decisions based on probabilities via offering different bets and seeing which ones get chosen.
I don’t know how much quantification has been done on incorrect Bayesian updates. Could one suggest trades where one is given options one of which has been recommended by an “expert” who has made the correct prediction to a 50:50 question on a related topic x times in a row. How much do people adjust based on the evidence of the expert? This doesn’t sound perfect to me, maybe someone else has a better version or maybe people are already doing this research?!
Get a pack of cards in which some cards are blue on both sides, and some are red on one side and blue on the other. Pick a random card from the pile. If the subject is shown one side of the card, and its blue, they gain a bit of evidence that the card is blue on both sides. Give them the option to bet on the colour of the other side of the card, before and after they see the first side. Invert the prospect theory curve to get from implicit probability to betting behaviour. The people should perform a larger update in log odds when the pack is mostly one type of card, over when the pack is 50 : 50.