Probability theory plus noise: Replies to Crupi and Tentori (2016) and to Nilsson, Juslin, and Winman (2016).

Abstract

A standard assumption in much of current psychology is that people do not reason about probability using the rules of probability theory but instead use various heuristics or "rules of thumb," which can produce systematic reasoning biases. In Costello and Watts (2014), we showed that a number of these biases can be explained by a model where people reason according to probability theory but are subject to random noise. More importantly, that model also predicted agreement with probability theory for certain expressions that cancel the effects of random noise: Experimental results strongly confirmed this prediction, showing that probabilistic reasoning is simultaneously systematically biased and "surprisingly rational." In their commentaries on that paper, both Crupi and Tentori (2016) and Nilsson, Juslin, and Winman (2016) point to various experimental results that, they suggest, our model cannot explain. In this reply, we show that our probability theory plus noise model can in fact explain every one of the results identified by these authors. This gives a degree of additional support to the view that people's probability judgments embody the rational rules of probability theory and that biases in those judgments can be explained as simply effects of random noise.