2 5 / 0 1 / 2 0 2 2

R E P R E S E N TAT I V E N E S S
ODHRÁN MCDONNELL
JAKE PICKERING
ROHAN POULOSE
D E E PA K A L B E RT
CONOR YOUNG
HEURISTICS

B I A S
&
H E U R I S T I C S
"Rules used by people to reduce complex tasks of assessing probabilities and
predicting values to simpler judgemental operations."

Source: Tversky and Kahneman (1974)

TYPES OF
HEURISTICS

• Representativeness

B I A S
• Availability
• Adjustment & Anchoring

&
H E U R I S T I C S
Source: Tversky and Kahneman (1974)
REPRESENTATIVENESS

Representativeness is the
heuristic rule in which
probabilities are evaluated
by the degree of
representation.

Source: Tversky and Kahneman (1974)

 FACTORS UNDER
REPRESENTATIVENESS

1 ILLUSION OF VALIDITY
4 INSENSITIVITY TO SAMPLE SIZE

2 5
MISCONCEPTIONS OF INSENSITIVITY TO PREDICTABILITY
REGRESSION

INSENSITIVITY TO PRIOR

3 MISCONCEPTIONS OF CHANCE
6 PROBABILITY OF OUTCOMES
 FACTORS UNDER
REPRESENTATIVENESS

1 ILLUSION OF VALIDITY

2
MISCONCEPTIONS OF
REGRESSION

3 MISCONCEPTIONS OF CHANCE
 MENTRA THEFT

POTENTIAL SUSPECTS

ODHRÁN MCDONNELL ROHAN POULOSE CONOR YOUNG

Employee at Mentra Chef at Mentra Customer at Mentra
 DA
AR
' S G E
IT T IM
 PICKERING CCTV
PICK ITSERVICES
AND FORGET IT!!!
Contact: https://www.linkedin.com/in/jakepickering
1
ILLUSION OF
VALIDITY
"The illusion of validity is a cognitive bias that
describes our tendency to be overconfident in
the accuracy of our judgements, specifically in
our interpretations and predictions regarding a
given data set"

Source: Illusion of validity - Biases & Heuristics | The Decision Lab

 ILLUSION OF VALIDITY:
COFFEE EXAMPLE & PRESENTATION
2
MISCONCEPTIONS
OF REGRESSION

"A statistical phenomenon that can make

natural variation
in repeated data look like real change."

Source: Barnett et al (2005).

KAHNEMAN & TVERSKY, 1974

REGRESSION TO THE MEAN IS WIDELY

MISUNDERSTOOD

• Regression is inevitable in many cases

• Society invent dubious causal

explanations for it
 EMMA RADUCANU: TOO MUCH TOO SOON?

2021: US Open 2022: Regression to her

Champion mean?
Regression to the Mean:
Newcastle United
&
Over Performance
WA S I T J U S T L U C K ?

EXPECTATION V REALITY
(Ankersen, 2018)
THE NATURE OF REGRESSING:
RETURNING TO THE MEAN

• Decrease in conversion rates

and attacking performance

• No improvements to the team

• No changes to the coaching

staff

• No changes within the club

Actual points per game Expected points per game

 03
MISCONCEPTIONS
OF CHANCE
The expectation that "a sequence of events
generated by a random process will represent
the essential characteristics of that process even
when the sequence is short." (Kahneman &
Tversky, 1974).

https://www.menti.com/fcii7t3y5c
MISCONCEPTIONS OF CHANCE

ROULETTE WHEEL

COLOUR STREAK RECORD

Happened in 1943 when red won 32 times

consecutively.

1 in 24,230,088,924 chance of happening.

Previous spins have no effect on what colour is

likely to come up next.

MAZLE (2016)
MISCONCEPTIONS OF CHANCE

GAMBLER'S FALLACY
The incorrect belief that the probability of an independent
event is lowered when it has happened recently, or that the
probability has increased when it hasn't happened recently
Example: Believing the next dice roll is more than usually likely
to be a three as three hasn't appeared in a number of rolls
EXPECTING MOTHER FALLACY
Barron & Leider (2008). Harvard Business School

• A mother is expecting her 11th child

• The birth order of her previous 10 children was BBGBBBGGGG

• Understandably, she may feel she is overdue a boy and that the probability is
much higher than it actually is

• People often expect runs of the same outcome to be less likely than they
actually are
Questions?