@inproceedings{eb505038203b440093c7aafb3b29bb50,
title = "The high availability of extreme events serves resource-rational decision-making",
abstract = "Extreme events come to mind very easily and people overestimate their probability and overweight them in decision-making. In this paper we show that rational use of limited cognitive resources can generate these'availability biases.' We hypothesize that availability helps people to quickly make good decisions in very risky situations. Our analysis shows that agents who decide by simulating a finite number of possible outcomes (sampling) should over-sample outcomes with extreme utility. We derive a cognitive strategy with connections to fast-and-frugal heuristics, and we experimentally confirm its prediction that an event's extremity increases the factor by which people overestimate its frequency. Our model also explains three context effects in decision-making under risk: framing effects, the Allais paradox, and preference reversals.",
keywords = "availability, Bayesian, bounded rationality, cognitive biases, decision-making, heuristics, judgment",
author = "Falk Lieder and Ming Hsu and Griffiths, {Thomas L.}",
note = "Funding Information: Acknowledgments. This work was supported by grant number N00014-13-1-0341 from the Office of Naval Research and grant number RO1 MH098023 from the National Institutes of Health. Publisher Copyright: {\textcopyright} 2014 Proceedings of the 36th Annual Meeting of the Cognitive Science Society, CogSci 2014. All rights reserved.; 36th Annual Meeting of the Cognitive Science Society, CogSci 2014 ; Conference date: 23-07-2014 Through 26-07-2014",
year = "2014",
language = "English (US)",
series = "Proceedings of the 36th Annual Meeting of the Cognitive Science Society, CogSci 2014",
publisher = "The Cognitive Science Society",
pages = "2567--2572",
booktitle = "Proceedings of the 36th Annual Meeting of the Cognitive Science Society, CogSci 2014",
}