Faith in intuition and behavioral biases

Carlos Alós-Ferrer, Sabine Hügelschäfer

Research output: Contribution to journalArticle

Abstract

We use a 15-item self-report questionnaire known as " Faith in Intuition" to measure reliance on intuitive decision making, and ask whether the latter correlates with behavioral biases involving a failure of Bayesian updating. In a first experiment, we find that higher report scores are associated with an increased use of the representativeness heuristic (overweighting sample information). We find no evidence of increased conservatism (overweighting prior information). The results of a second experiment show that more intuitive decision makers rely more often on the " reinforcement heuristic" where successful decisions are repeated even if correctly updating prior beliefs indicates otherwise. However, this effect depends on the magnitude of incentives.

Original languageEnglish (US)
Pages (from-to)182-192
Number of pages11
JournalJournal of Economic Behavior and Organization
Volume84
Issue number1
DOIs
StatePublished - Sep 2012

Keywords

  • Bayesian updating
  • Behavioral biases
  • Conservatism
  • Intuition
  • Reinforcement
  • Representativeness

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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