Behavioral Decision Studies

Probability judgments are pivotal in guiding human decision making. The prevailing assumption in psychology is that human probability judgments are often biased. We challenge this view and present evidence of humans' remarkable capacities in judging probabilities. In particular, we discuss regression to the mean, probability judgments of conjunctive and disjunctive events, the consideration of base-rate information, probability judgments based on small samples, judgments of personal risks, and external influences on probability judgments. We conclude that in real-life contexts, in which the correct normative solutions are usually unknown, heuristics are useful tools for making fast and frugal judgments and decisions. Keywords: probability judgments; heuristics; probability estimation; Bayes' theorem; cognitive processes; risk