1. For the following findings, carefully discuss (i) why it reflects a statistical mistake; and (ii) how it can be explained by the representativeness heuristic.

a) ) Subjects were told to imagine the following scenario. An urn is filled with red and white balls, where one-third of the balls is one color and

two-thirds is the other color. The probability that the urn has more red balls than white balls is one-half (and so is the probability that the

urn has more white balls than red balls). One person has drawn 5 balls from the urn with replacement, and found that 4 were red and 1

was white. Another person has drawn 20 balls from the urn with replacement, and found that 12 were red and 8 were white. Subjects were

then asked which person should be more confident that the urn has more red balls than white balls. Most subjects guessed the first

person, the one who has drawn five balls. (In reality, the second person should be twice as confident. Which one can derive this using

Bayes' rule).