Tversky & Kahneman, 1973, on systematic biases... Availability: A heuristic for judging frequency and probability

From 1973... Availability: A heuristic for judging frequency and probability. Amos Tversky, Daniel Kahneman. Cognitive Psychology, Volume 5, Issue 2, September 1973, Pages 207-232. https://doi.org/10.1016/0010-0285(73)90033-9

Abstract: This paper explores a judgmental heuristic in which a person evaluates the frequency of classes or the probability of events by availability, i.e., by the ease with which relevant instances come to mind. In general, availability is correlated with ecological frequency, but it is also affected by other factors. Consequently, the reliance on the availability heuristic leads to systematic biases. Such biases are demonstrated in the judged frequency of classes of words, of combinatorial outcomes, and of repeated events. The phenomenon of illusory correlation is explained as an availability bias. The effects of the availability of incidents and scenarios on subjective probability are discussed.

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Daniel Kahneman – Prize Lecture. NobelPrize.org. Nobel Media AB 2019. Mar 03 2019. https://www.nobelprize.org/prizes/economic-sciences/2002/kahneman/lecture

"Remarkably, the intuitive judgments of these experts did not conform to statistical principles with which they were thoroughly familiar. In particular, their intuitive statistical inferences and their estimates of statistical power showed a striking lack of sensitivity to the effects of sample size. We were impressed by the persistence of discrepancies between statistical intuition and statistical knowledge, which we observed both in ourselves and in our colleagues. We were also impressed by the fact that significant research decisions, such as the choice of sample size for an experiment, are routinely guided by the flawed intuitions of people who know better."

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Check also From William Niskanen's obituary at the Washington Post, William A. Niskanen Jr., economist and former Cato Institute chairman, dies. By T. Rees Shapiro. Washington Post, November 1, 2011. http://www.washingtonpost.com/local/obituaries/william-a-niskanen-jr-economist-and-cato-institute-chairman-dies/2011/10/31/gIQAuM1RaM_story.html

At Ford, Dr. Niskanen found, conformity was key. But it was a lesson Dr. Niskanen did not learn until 1980, when he was fired for breaking ranks with the executives.

During the 1970s, the nation's car industry was battered by rising gas prices. For Japanese manufacturers, touting smaller cars with fuel-sipping engines, American sales took off.

In late 1979, Ford begged for a government intervention, asking the International Trade Commission to impose quotas on Japanese cars.

[...]

Dr. Niskanen told Ford executives that the government could not cure the company's ills. Japan was not the problem, Dr. Niskanen told his bosses; they were.

[...]

Ford's real issue, Dr. Niskanen said, was bad product decisions.

Upon hearing his advice, Ford executives dismissed Dr. Niskanen.

"I was told, Bill, in general, people who do well in this company wait until they hear their superiors express their view and then contribute something in support of that view,・ Dr. Niskanen said in an 1980 interview with the Wall Street Journal. "That wasn", and isn't, my style."
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