Critical Thinking. All of the following examples came from Daniel Kahneman’s book Thinking, Fast and Slow . Question #1. Here is a simple puzzle. Do not try to solve it but listen to your intuition: A bat and ball cost $1.10. The bat costs one dollar more than the ball.

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Critical Thinking

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Critical Thinking All of the following examples came from Daniel Kahneman’s book Thinking, Fast and Slow.

Question #1 Here is a simple puzzle. Do not try to solve it but listen to your intuition: A bat and ball cost $1.10. The bat costs one dollar more than the ball. How much does the ball cost?

Question #2 Try to determine, as quickly as you can, if the argument is logically valid. Does the conclusion follow the premises? All roses are flowers. Some flowers fade quickly. Therefore some roses fade quickly.

Question #4 In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake? 24 days or 47 days?

Question 6 for group A How happy are you these days? How many dates did you have last month? On a scale of 1 to 10 with 10 being the happiest, how happy are you?

Question 6 for group B How many dates did you have last month? How happy are you these days? On a scale of 1 to 10 with 10 being the happiest, how happy are you?

Question #7 Take the sex of six babies born in sequence at a hospital. Consider three possible sequences: BBBGGG GGGGGG BGBBGB Are the sequences equally likely?

Question 8 for group A Anchoring Is the height of the tallest redwood more or less than 1,200 feet? What is your best guess about the height of the tallest redwood?

Question 8 for group B Anchoring Is the height of the tallest redwood more or less than 180 feet? What is your best guess about the height of the tallest redwood?

Question 9 Consider the pairs of causes of death. Indicate the more frequent cause and estimate the ratio of the two frequencies. Strokes and Accidents Asthma and Tornadoes Lightning and Botulism Disease and Accidents Diabetes and Accidents

answer 9 Strokes cause almost twice as many deaths as all accidents combined. Asthma causes 20 times more deaths than tornadoes Death by lightning is 52 more frequent than by botulism Death by disease is 18 times more likely as accidental life Death by diabetes is 4 times more likely than by accident

Question #10 Business administration Computer science Engineering Humanities and education Pre-Law Library science Physical and life sciences Social science &social work

Tom W is of high intelligence, although lacking in true creativity. He has a need for order and clarity, and for neat and tidy systems in which every detail finds its appropriate place. His writing is rather dull and mechanical, occasionally enlivened by somewhat corny puns and flashes of imagination of the sci-fi type. He has a strong drive for competence. He seems to have little feel and little sympathy for other people, and does not enjoy interacting with others. Self-centered, he nonetheless has a deep moral sense.

Tom W was intentionally designed as an “anti-base- rate” character, a good fit to small groups and a poor fit to the most populated specialties. Substitution is perfect in this case: there is no indication that participants did anything else but judge representativeness. The question about probability (likelihood) was difficult, but the question about similarity was easier, and people answer it instead.

Business administration 17.3 % of students Computer science 2.8 Engineering 5.3 Humanities and education 24.8 Pre-Law 4.9 Library science 0.9 Physical and life sciences 13.2 Social science &social work8.6

Question #11 Linda is thirty-one 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 antinuclear demonstrations. Which statement is more likely correct Linda is a bank teller who is active in the feminist movement Linda is a bank teller

Think in terms of Venn diagrams. The set of feminist bank tellers is wholly included in the set of bank tellers, as every feminist bank teller is a bank teller.

Question #12 Price sets of dinnerware offered in a local store, where dinnerware regularly runs between $30 and $60. Assuming the dishes in the two sets are of equal quality. Please set a price for Set A and a price for Set B.

Question #13 A regular six-sided die has four green faces and to red faces will be rolled 20 times. Which sequence will be more likely? RGRRR GRGRRR GRRRRR

Because the die has twice as many green sides as red sides, the first sequence is quite unrepresentative. The second sequence, which contains six tosses, is a better fit to what we expect from this die, because it includes two G’s. However, this sequence was constructed by adding a G to the beginning of the first sequence, so it can only be less likely than the first.

Example 14 A cab was involved in a hit and run accident at night. Two companies, the Green and Blue, operate in the city. You are given the following data:

Example 14 85% of the cabs in the city are Green and 15% Blue. A witness identified the cab as Blue. The court tested the reliability of the witness under the circumstances that existed on the night of the accident and concluded that the witness correctly identified each of the two colors 80% of the time and failed 20% of the time. What is the probability the cab involved in the accident was Blue?

Overconfidence #15 For a number of years, professors at Duke conducted a survey in which CFO’s of large corporations estimated the returns of the S&P index over the following year. The Duke scholars collected 11,600 such forecasts and examined their accuracy.

Overconfidence #15 The conclusion was straightforward: CFOs of larger corporations had no clue about the short-term future of the stock market; the correlation between their estimates and the true value was slightly less than zero! The truly bad news is that the CFOs did not appear to know that their forecasts were worthless.

Overconfidence #15 In addition to their estimates, participants provided two other estimates: a value that they were 90% sure would be too high, and one that they were 90% sure would be too low. The range between the two values is called an “80% confidence interval” and outcomes that fall outside the interval are labeled surprises. …

Overconfidence #15 … As frequently happens in such exercises, there were far too many surprises; their incidence was 67%, more than 3 times higher than expected. This shows that CFOs were grossly overconfident about their ability to forecast the market.

Overconfidence #15 The confidence interval that properly reflects the CFOs knowledge is more than four times wider than the intervals they actually stated.

Gamble #16 Anthony’s current wealth is 1 million Betty’s current wealth is 4 million. They are both offered a choice between a gamble and a sure thing. The gamble: equal chances to end up owning 1 or 4 million OR The sure thing: own 2 million for sure

Gamble #16 Anthony and Betty face the same outcomes: their expected wealth will be b 2.5 million if they take the gamble and 2 million if they prefer the sure-thing option.

Gamble #16 Anthony (who currently owns 1 million): If Anthony chooses the sure thing, his wealth will double with certainty. This is very attractive. Alternatively, he can take a gamble with equal chances to quadruple his wealth or gain nothing.

Gamble #16 Betty (who currently owns 4 million): If Betty chooses the sure thing, she loses half of her wealth with certainty, which is awful. Alternatively, she can take a gamble with equal chances to lose three quarters of her wealth or to lose nothing.

Gamble #17 part 1 In addition to whatever you own, you have been given $1,000. You are now asked to choose one of these options: 50% chance to win $1,000 OR get $500 for sure

Gamble #17 part 2 In addition to whatever you own, you have been given $2,000. You are now asked to choose one of these options: 50% chance to lose $1,000 OR lose $500 for sure

Gamble #17 The outcomes are identical 50% $2,000 50% $1,000 Or $1,500 with certainty

Allais’s Paradox #18 A: 61% chance to win $520,000 OR 63% chance to win $500,000 B: 98% chance to win $520,000 OR 100% chance to win $500,000 Imagine the outcome will be determined by a blind draw from an urn containing 100 marbles – you win if you draw a red marble, you lose if you draw white.

A: 61% chance to win $520,000 OR 63% chance to win $500,000 B: 98% chance to win $520,000 OR 100% chance to win $500,000 In problem A, almost everyone prefers the left-hand urn, although it has fewer winning red marbles, because the difference in the size of the prize is more impressive than the difference in the chances of winning. In problem B, a large majority choose the urn with that guarantees a gain of $500,000.

A: 61% chance to win $520,000 OR 63% chance to win $500,000 B: 98% chance to win $520,000 OR 100% chance to win $500,000 The two urns in problem B are more favorable versions of problem A, with 37 white marbles replaced by red winning marbles in each earn. The improvement of the left is clearly superior because each red marble gives you a chance to win $520,000 on the left and only $500,000 on the right. So you started in the first problem with a preference for the left-hand urn, which was improved more than the right-hand urn – but now you prefer the urn on the right.