Working Paper: NBER ID: w25692
Authors: Pedro Bordalo; Katherine Coffman; Nicola Gennaioli; Frederik Schwerter; Andrei Shleifer
Abstract: We explore the idea that judgment by representativeness reflects the workings of episodic memory, especially interference. In a new laboratory experiment on cued recall, participants are shown two groups of images with different distributions of colors. We find that i) decreasing the frequency of a given color in one group significantly increases the recalled frequency of that color in the other group, ii) for a fixed set of images, different cues for the same objective distribution entail different interference patterns and different probabilistic assessments. Selective retrieval and interference may offer a foundation for the representativeness heuristic, but more generally for understanding the formation of probability judgments from experienced statistical associations.
Keywords: memory; representativeness; probabilistic judgments; cognitive biases
JEL Codes: D03; D81; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decreasing the frequency of a specific color in one group (C92) | significantly increases the recalled frequency of that color in another group (C92) |
| interference from the decoy distribution affects recall (D80) | decrease in the estimated frequency of blue numbers (C46) |
| interference from the decoy distribution affects recall (D80) | increase in the likelihood of recalling orange numbers (C92) |
| framing of questions (C83) | systematic biases in recall and judgment (D91) |
| selective retrieval and interference (D87) | forming probability judgments from experienced statistical associations (C53) |