Empirical evidence on the common ratio effect, a version of the Allais paradox, indicates that people are nonlinearly sensitive to probabilities. The leading explanation of this effect is prospect theory and its nonlinear weights applied to probabilities. We propose an alternative explanation:...

Decision makers often make snap judgments using fast-and-frugal decision rules called cognitive heuristics. Research into cognitive heuristics has been divided into two camps. One camp has emphasized the limitations and biases produced by the heuristics; another has focused on the accuracy of...