Heuristics and biases

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To analyse decision-making under risk and uncertainty, we need to consider how people form beliefs and compute probabilities in any decision.

In this part, I will discuss several heuristics that are proposed to be used in probability judgment. This sets a basis to examine biases in probability judgment and the heuristics and models that have been proposed as explanations for these biases. As a contrast, we will also examine how heuristics can function as effective decision-making tools. Finally, I will consider several dimensions of overconfidence.