Memory and Representativeness

Citation:

Bordalo, Pedro, Katherine Coffman, Nicola Gennaioli, Frederik Schwerter, and Andrei Shleifer. Working Paper. “Memory and Representativeness”.
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Abstract:

We explore the idea that judgment by representativeness reflects the workings
of episodic memory, especially interference. In a new laboratory experiment on cued
recall, participants are shown two groups of images with different distributions of
colors. We find that i) decreasing the frequency of a given color in one group significantly
increases the recalled frequency of that color in the other group, ii) for a
fixed set of images, different cues for the same objective distribution entail different
interference patterns and different probabilistic assessments. Selective retrieval
and interference may offer a foundation for the representativeness heuristic, but
more generally for understanding the formation of probability judgments from experienced
statistical associations.