Proceedings of the Annual Meeting of the Cognitive Science Society

How much do individuals, compared to the population, knowabout the distribution of values in the world? Participantsreported the prices of consumer goods such as watches andbelts and we compared how accurately individuals vs. theoverall population knew the mean and dispersion of prices.Although individuals and the population both knew objects’average prices and relative standard deviations, the populationwas more sensitive to the absolute standard deviation ofprices. In a second experiment, we examined whetherindividuals’ impoverished distribution knowledge impairstheir ability to interpret advertisements. Consistent withpeople using Bayesian inference, the higher an object’s actualprice dispersion, the more participants relied onadvertisements; however, this effect is considerably smallerthan a simple proportional offset, suggesting again thatindividuals underestimate dispersion. Thus, despite having asense of the distribution of real world quantities, individualstend to know only a fraction of the world distribution.