Cognitive Noise Generates Higher-Order Uncertainty

Some of our judgments under uncertainty are clear and reliable—how likely do you think this fair coin is to land heads? Others are ambiguous and noisy—how likely do you think I am to own a dozen spoons? I propose that ambiguity is higher-order uncertainty: subjective probabilistic uncertainty about our own subjective probabilities. I show that such higher-order uncertainty is mathematically coherent and would be behaviorally significant—predicting forms of bias (violations of "Reflection" principles) disallowed by virtually all Bayesian models in cognitive science. But if we have higher-order uncertainty, why can't we resolve it simply by acting? Because cognitive noise makes the link between subjective probabilities and behavior stochastic. I summarize the empirical evidence for this, describe a popular model of it, argue that reasonable agents should be expected to exhibit cognitive noise when and only when they have higher-order uncertainty, and report on a new experiment showing that higher-order uncertainty predicts cognitive noise.