Econowmics

Tagged: The Linda Problem

Economists

Daniel Kahneman

  Although we always assume, or at least used to assume, that people make rational choices and show reasonable behavior in everyday life situations, the truth begs to differ. Daniel Kahneman is one of the reasons that we know about all this. He is truly one of the leaders in experimental economics and behavioral economics. Kahneman was born in Tel Aviv in 1934. Since his parents were Jewish, he and his family faced several threats during World War II and had to constantly emigrate within Europe, especially France, to escape from the Nazis. After the war, he moved to Palestine...

Cognitive Biases

The Conjunction Fallacy

  Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which choice is more probable? Linda is a bank teller Linda is a bank teller and is active in feminist movement According to the laws of probability, the latter one must be less likely than the other one, as for it to be true, it needs two conditions to be met: first, Linda must be a bank teller and then she must also be a...