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Memory and representativeness

Bordalo, Pedro, Coffman, Katherine, Gennaioli, Nicola, Schwerter, Frederik and Shleifer, Andrei Memory and representativeness. NBER, Cambridge, MA..

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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.

Item Type: Other Working Paper
Keywords: finance
Subject(s): Finance
Date Deposited: 09 May 2019 10:49
Last Modified: 09 May 2019 10:49
Funders: Gennaioli thanks the European Research Council (GA 647782) for financial support. Schwerter and Shleifer thank the Sloan Foundation for financial support.
URI: http://eureka.sbs.ox.ac.uk/id/eprint/7384

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