We consider the dynamics of reasoning by general rules (theories) and by specific cases (analogies). When an agent faces an exogenous process, we show that, under mild conditions, if reality happens to be simple, the agent will converge to adopt a theory and discard analogical thinking. If,...

This paper provides a description of a possible mental process individuals go through in their attempt to comprehend stated probabilities in simple lotteries. The evaluation of probabilities is based on the following main components: lotteries encountered in the past, the realizations of these...