Supposedly the bias is that we give more credence to a more specific and credible-sounding description than something vague. In the book, Kahnemann asks three completely independent groups one of those three questions each and gets them to assign a likelihood. I think the '85% of people got this wrong' is an incorrect description of Kahnemann's experiment... it'd be more like "in 85% of cases, the probabilities assigned by independent groups gave an impossible result"
Interesting. I'm having trouble wrapping my head around the bias part. Are you saying that since the 3rd option is very specific, people are inclined to believe it? If so, I wonder why that is. Thanks for the information!
Not exactly because it is specific, but the specific details form a narrative that sounds plausible. The Black Swan descibes Kahneman and Tversky asking forecasting professionals to give odds on the following two events: a. A massive flood somewhere in America in which more than a thousand people die. b. An earthquake in California, causing massive flooding, in which more than a thousand people die. The first event was rated less likely than the second, even though that description includes the second scenario and more. Another example: Joey seemed happily married. He killed his wife. This seems unlikely; it doesn't make sense. Joey seemed happily married. He killed his wife to get her inheritance. Now it seems more likely, even though we have reduced the possible scope of causes.
Thanks for the explanation! I think I was doing what cgod was doing on the 2nd question and looking at it too deeply, when it was a much simpler question than what I imagined.