Critical Thinking: Statistical Reasoning and Intuitive Judgment

This book traces the patterns of decision-making common to humankind, psychological mechanisms that govern thought patterns, the tools generally used to evaluate outcomes intuitively, errors in calculation, factors that influence judgment and deviance from statistical likelihood. Taking all these factors together, the authors have painted a picture of why faulty judgment and miscalculation are so common – in professional evaluation, in business, in gambling, in risk-taking in general and in practically every walk of life.

Designed to provide students with basic tools for critical thinking which will help them to become intelligent information consumers, the book is a required textbook in all universities in Israel, both in economics and psychology.

The book presents concepts in statistics and relevant methodological considerations (such as control groups, sampling errors, central tendency, calibration) along with psychological mechanisms (such as representativeness, availability and anchoring), which human beings tend to use to intuitively evaluate information. It focuses on issues in which intuitive impressions which do not coincide with statistical considerations often result in systematic biases such as gambler’s fallacy, over-confidence, spurious correlation, and non-regressive prediction.

1996, 360 pp., cat # 10145

Dr. Varda Liberman is Vice Dean of the Arison School of Business and Director of Mathematical and Statistical Studies at Interdisciplinary Center, Herzliya. She has published several textbooks in mathematics and statistics.

The late Amos Tversky was Professor of Behavioral Sciences at Stanford University and a long-time collaborator of Nobel Prize laureate Daniel Kahneman. Together, they originated prospect theory to explain irrational human economic choices, for which Kahneman received the 2002 Nobel Prize. Together with Kahneman and Paul Slovic, he edited Judgment under Uncertainty: Heuristics and Biases (Cambridge University Press, 1982), and with Kahneman, he edited Choices, Values, and Frames (Cambridge University Press, 2000). Recently MIT Press published his selected works: Preference, Belief, and Similarity: Selected Writings (2003), edited by Eldar Shafir.

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