We often have to make decisions without having all the information we expected. We make this decision on the belief of perceived likelihood of events. Obviously, evaluating uncertain events is an incredibly difficult task. Unfortunately, it is mandatory for risk management or data analysis. This judgment is subjective although we may believe it is rationale.
In 1974, Amos Tversky and Daniel Kahneman published a paper “Judgment under uncertainty: heuristics and biases.” They explored the different biases that will taint our decision and that we are most probably not aware of.
- Insensitivity to sample sizes. The size of the sample impacts its representativeness
- Misconception of chance; many people believe that the probability of dice sequence 111111 is far lower than the sequence 163125
- Biases of imaginability;
The paper lists ten such biases. Being aware of them is worthwhile. The article remains me a lot of the book “Predictably irrational.”
Nice to read for security guys and data analysts.
Tversky, Amos, and Daniel Kahneman. “Judgment under Uncertainty: Heuristics and Biases.” In Utility, Probability, and Human Decision Making, edited by Dirk Wendt and Charles Vlek, 141–62. Theory and Decision Library 11. Springer Netherlands, 1975. http://www.cob.unt.edu/itds/faculty/evangelopoulos/busi6220/Kahneman1974_Science_JudgementUnderUncertainty.pdf