GloboSnax has an overall 10% success rate when introducing new products. (Suppose success here means a product achieves a certain target market share within 2 years of its introduction.)

Before roll-out, a secret forecasting committee assesses each new product, and calls it a "winner" or "loser." In the past, the committee has done reasonably well in distinguishing between successful and unsuccessful products:

-90% of products that went on to succeed were correctly called "winners" by the committee.

80% of products that went on to fail were correctly called "losers" by the committee.

A new product, CocoChips is evaluated and labeled a "winner" by the committee.

(5 pts) Based on the information available, calculate the probability that CocoChips will succeed, given the "winner" classification from the forecasting committee. (Hint: you can use a 2x2 table, and/or Bayes Rule formula to help compute your answer.)

(3 pts) What would be a plausible intuitive probability judgment for the quantity in question 4 from someone exhibiting base-rate neglect? Explain.

Which of the following best describes the two-system model of judgment described in Thinking, Fast and Slow? (a) System 1 is automatic and System 2 is reflective. (b) System 1 is available and System 2 is representative. (c) System 1 is rewarding and System 2 is punishing. (d) All of the above are true