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Heuristics is the process by which humans use mental short cuts to arrive at decisions.
Heuristic A heuristic (; ), or heuristic technique, is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediate, ...
s are simple strategies that humans, animals, organizations, and even machines use to quickly form
judgment Judgement (or US spelling judgment) is also known as ''adjudication'', which means the evaluation of evidence to make a decision. Judgement is also the ability to make considered decisions. The term has at least five distinct uses. Aristotle s ...
s, make decisions, and find solutions to complex problems. Often this involves focusing on the most relevant aspects of a problem or situation to formulate a solution. While heuristic processes are used to find the answers and solutions that are ''most'' likely to work or be correct, they are not always right or the most accurate. Judgments and decisions based on heuristics are simply good enough to satisfy a pressing need in situations of uncertainty, where information is incomplete. In that sense they can differ from answers given by
logic Logic is the study of correct reasoning. It includes both formal and informal logic. Formal logic is the science of deductively valid inferences or of logical truths. It is a formal science investigating how conclusions follow from premise ...
and
probability Probability is the branch of mathematics concerning numerical descriptions of how likely an event is to occur, or how likely it is that a proposition is true. The probability of an event is a number between 0 and 1, where, roughly speaking ...
. The economist and cognitive psychologist Herbert A. Simon introduced the concept of heuristics in the 1950s, suggesting there were limitations to rational decision making. In the 1970s, psychologists
Amos Tversky Amos Nathan Tversky ( he, עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his ...
and
Daniel Kahneman Daniel Kahneman (; he, דניאל כהנמן; born March 5, 1934) is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarde ...
added to the field with their research on
cognitive bias A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, ...
. It was their work that introduced specific heuristic models, a field which has only expanded since. While some argue that pure laziness is behind the heuristics process, others argue that it can be more accurate than decisions based on every known factor and consequence, the less-is-more effect.

# History

Herbert A. Simon formulated one of the first models of heuristics, known as satisficing. His more general research program posed the question of how humans make decisions when the conditions for
rational choice theory Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postula ...
are not met, that is how people decide under uncertainty. Simon is also known as the father of
bounded rationality Bounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal. Limitations include the difficulty of ...
, which he understood as the study of the match (or mismatch) between heuristics and decision environments. This program was later extended into the study of ecological rationality. In the early 1970s, psychologists
Amos Tversky Amos Nathan Tversky ( he, עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his ...
and
Daniel Kahneman Daniel Kahneman (; he, דניאל כהנמן; born March 5, 1934) is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarde ...
took a different approach, linking heuristics to cognitive biases. Their typical experimental setup consisted of a rule of logic or probability, embedded in a verbal description of a judgement problem, and demonstrated that people's intuitive judgement deviated from the rule. The "Linda problem" below gives an example. The deviation is then explained by a heuristic. This research, called the heuristics-and-biases program, challenged the idea that human beings are rational actors and first gained worldwide attention in 1974 with the ''
Science Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earliest archeological evidence f ...
'' paper "Judgment Under Uncertainty: Heuristics and Biases" and although the originally proposed heuristics have been refined over time, this research program has changed the field by permanently setting the research questions. The original ideas by Herbert Simon were taken up in the 1990s by Gerd Gigerenzer and others. According to their perspective, the study of heuristics requires formal models that allow predictions of behavior to be made ''ex ante''. Their program has three aspects: # What are the heuristics humans use? (the descriptive study of the "adaptive toolbox") # Under what conditions should humans rely on a given heuristic? (the prescriptive study of ecological rationality) # How to design heuristic decision aids that are easy to understand and execute? (the engineering study of intuitive design) Among others, this program has shown that heuristics can lead to fast, frugal, and accurate decisions in many real-world situations that are characterized by uncertainty. These two different research programs have led to two kinds of models of heuristics, formal models and informal ones. Formal models describe the decision process in terms of an algorithm, which allows for mathematical proofs and computer simulations. In contrast, informal models are verbal descriptions.

# Formal models of heuristics

## Simon's satisficing strategy

Herbert Simon's satisficing heuristic can be used to choose one alternative from a set of alternatives in situations of uncertainty. Here, uncertainty means that the total set of alternatives and their consequences is not known or knowable. For instance, professional real-estate entrepreneurs rely on satisficing to decide in which location to invest to develop new commercial areas: "If I believe I can get at least x return within y years, then I take the option." In general, satisficing is defined as: * Step 1: Set an aspiration level α * Step 2: Choose the first alternative that satisfies α If no alternative is found, then the aspiration level can be adapted. * Step 3: If after time β no alternative has satisfied α, then decrease α by some amount δ and return to step 1. Satisficing has been reported across many domains, for instance as a heuristic car dealers use to price used BMWs.

## Elimination by aspects

Unlike satisficing,
Amos Tversky Amos Nathan Tversky ( he, עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his ...
's elimination-by-aspect heuristic can be used when all alternatives are simultaneously available. The decision-maker gradually reduces the number of alternatives by eliminating alternatives that do not meet the aspiration level of a specific attribute (or aspect). During a series of selections, people tend to experience uncertainty and exhibit inconsistency. Elimination by aspects could be used when facing selections. In general, the process of elimination by aspects is as follows: ·Step 1: Select one attribute related to decision making ·Step 2: Eliminate all alternatives that exclude this specific attribute ·Step 3: Use another attribute in order to further eliminate alternatives ·Step 4: Repeat step 3 until only one option is left, a decision has then been made Elimination by aspects does not speculate that choosing alternatives could help consumers to maximize utility, on the contrary, it holds that selection is the result of a probabilistic process that gradually eliminates alternatives. A simple example is given by
Amos Tversky Amos Nathan Tversky ( he, עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his ...
: when someone wants to purchase a new car, the first aspect they will take into account might be the automatic transmission, this will eliminate all alternatives that do not contain such an aspect. Then when all the alternatives that do not have this feature are eliminated, another aspect will be given such as a 3000\$ price limit. The process of elimination continues to occur until all alternatives are eliminated. Elimination by aspects is well used in the early stage of business angels’ decision-making process since it facilitates a fast-decision-making tool - alternatives will be eliminated when investors find a critical defect of the potential opportunities. Another research also demonstrated that elimination by aspects has widely been used in electricity contract choice. The logic behind these two examples is that elimination by aspects helps to make decisions when facing a series of complicated choices. One may need to make a decision among all alternatives while he or she only has limited intuitive computational facilities and time. However, elimination by aspects as a compensatory model could help to make such complex decisions since it is easier to apply and involves nonnumerical computations.

## Recognition heuristic

The recognition heuristic exploits the basic psychological capacity for recognition in order to make inferences about unknown quantities in the world. For two alternatives, the heuristic is:
If one of two alternatives is recognized and the other not, then infer that the recognized alternative has the higher value with respect to the criterion.
For example, in the 2003 Wimbledon tennis tournament, Andy Roddick played Tommy Robredo. If one has heard of Roddick but not of Robredo, the recognition heuristic leads to the prediction that Roddick will win. The recognition heuristic exploits partial ignorance, if one has heard of both or no player, a different strategy is needed. Studies of Wimbledon 2003 and 2005 have shown that the recognition heuristic applied by semi-ignorant amateur players predicted the outcomes of all gentlemen single games as well and better than the seedings of the Wimbledon experts (who had heard of all players), as well as the ATP rankings. The recognition heuristic is ecologically rational (that is, it predicts well) when the recognition validity is substantially above chance. In the present case, recognition of players' names is highly correlated with their chances of winning.

## Take-the-best

The take-the-best heuristic exploits the basic psychological capacity for retrieving cues from memory in the order of their validity. Based on the cue values, it infers which of two alternatives has a higher value on a criterion. Unlike the recognition heuristic, it requires that all alternatives are recognized, and it thus can be applied when the recognition heuristic cannot. For binary cues (where 1 indicates the higher criterion value), the heuristic is defined as: Search rule: Search cues in the order of their validity v. Stopping rule: Stop search on finding the first cue that discriminates between the two alternatives (i.e., one cue values are 0 and 1). Decision rule: Infer that the alternative with the positive cue value (1) has the higher criterion value). The validity vi of a cue i is defined as the proportion of correct decisions ci: vi = ci / ti where ti is the number of cases the values of the two alternatives differ on cue i. The validity of each cue can be estimated from samples of observation. Take-the-best has remarkable properties. In comparison with complex machine learning models, it has been shown that it can often predict better than regression models, classification-and-regression trees, neural networks, and
support vector machine In machine learning, support vector machines (SVMs, also support vector networks) are supervised learning models with associated learning algorithms that analyze data for classification and regression analysis. Developed at AT&T Bell Laboratories ...
s. righton & Gigerenzer, 2015 Similarly, psychological studies have shown that in situations where take-the-best is ecologically rational, a large proportion of people tend to rely on it. This includes decision making by airport custom officers, professional burglars and police officers and student populations. The conditions under which take-the-best is ecologically rational are mostly known. Take-the-best shows that the previous view that ignoring part of the information would be generally irrational is incorrect. Less can be more.

## Fast-and-frugal trees

A fast-and-frugal tree is a heuristic that allows to make a classifications, such as whether a patient with severe chest pain is likely to have a heart attack or not, or whether a car approaching a checkpoint is likely to be a terrorist or a civilian. It is called “fast and frugal” because, just like take-the-best, it allows for quick decisions with only few cues or attributes. It is called a “tree” because it can be represented like a decision tree in which one asks a sequence of questions. Unlike a full decision tree, however, it is an incomplete tree – to save time and reduce the danger of overfitting. Figure 1 shows a fast-and-frugal tree used for screening for HIV (human immunodeficiency virus). Just like take-the-best, the tree has a search rule, stopping rule, and decision rule: ''Search rule'': Search through cues in a specified order. ''Stopping rule'': Stop search if an exit is reached. ''Decision rule'': Classify the person according to the exit (here: No HIV or HIV). In the HIV tree, an ELISA (enzyme-linked immunosorbent assay) test is conducted first. If the outcome is negative, then the testing procedure stops and the client is informed of the good news, that is, “no HIV.” If, however, the result is positive, a second ELISA test is performed, preferably from a different manufacturer. If the second ELISA is negative, then the procedure stops and the client is informed of having “no HIV.” However, if the result is positive, a final test, the Western blot, is conducted. In general, for n binary cues, a fast-and-frugal tree has exactly n + 1 exits – one for each cue and two for the final cue. A full decision tree, in contrast, requires 2n exits. The order of cues (tests) in a fast-and-frugal tree is determined by the sensitivity and specificity of the cues, or by other considerations such as the costs of the tests. In the case of the HIV tree, the ELISA is ranked first because it produces fewer misses than the Western blot test, and also is less expensive. The Western blot test, in contrast, produces fewer false alarms. In a full tree, in contrast, order does not matter for the accuracy of the classifications. Fast-and-frugal trees are descriptive or prescriptive models of decision making under uncertainty. For instance, an analysis or court decisions reported that the best model of how London magistrates make bail decisions is a fast and frugal tree. The HIV tree is both prescriptive– physicians are taught the procedure – and a descriptive model, that is, most physicians actually follow the procedure.

# Informal models of heuristics

In their initial research, Tversky and Kahneman proposed three heuristics—availability, representativeness, and anchoring and adjustment. Subsequent work has identified many more. Heuristics that underlie judgment are called "judgment heuristics". Another type, called "evaluation heuristics", are used to judge the desirability of possible choices.

## Availability

In psychology, ''availability'' is the ease with which a particular idea can be brought to mind. When people estimate how likely or how frequent an event is on the basis of its availability, they are using the availability heuristic. When an infrequent event can be brought easily and vividly to mind, this heuristic overestimates its likelihood. For example, people overestimate their likelihood of dying in a dramatic event such as a
tornado A tornado is a violently rotating column of air that is in contact with both the surface of the Earth and a cumulonimbus cloud or, in rare cases, the base of a cumulus cloud. It is often referred to as a twister, whirlwind or cyclone, althou ...
or
terrorism Terrorism, in its broadest sense, is the use of criminal violence to provoke a state of terror or fear, mostly with the intention to achieve political or religious aims. The term is used in this regard primarily to refer to intentional violen ...
. Dramatic, violent deaths are usually more highly publicised and therefore have a higher availability. On the other hand, common but mundane events are hard to bring to mind, so their likelihoods tend to be underestimated. These include deaths from
suicide Suicide is the act of intentionally causing one's own death. Mental disorders (including depression, bipolar disorder, schizophrenia, personality disorders, anxiety disorders), physical disorders (such as chronic fatigue syndrome), and subs ...
s,
stroke A stroke is a medical condition in which poor blood flow to the brain causes cell death. There are two main types of stroke: ischemic, due to lack of blood flow, and hemorrhagic, due to bleeding. Both cause parts of the brain to stop function ...
s, and
diabetes Diabetes, also known as diabetes mellitus, is a group of metabolic disorders characterized by a high blood sugar level (hyperglycemia) over a prolonged period of time. Symptoms often include frequent urination, increased thirst and increased a ...
. This heuristic is one of the reasons why people are more easily swayed by a single, vivid story than by a large body of statistical evidence. It may also play a role in the appeal of lotteries: to someone buying a ticket, the well-publicised, jubilant winners are more available than the millions of people who have won nothing. When people judge whether more
English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national i ...
words begin with ''T'' or with ''K'' , the availability heuristic gives a quick way to answer the question. Words that begin with ''T'' come more readily to mind, and so subjects give a correct answer without counting out large numbers of words. However, this heuristic can also produce errors. When people are asked whether there are more English words with ''K'' in the first position or with ''K'' in the third position, they use the same process. It is easy to think of words that begin with ''K'', such as ''kangaroo'', ''kitchen'', or ''kept''. It is harder to think of words with ''K'' as the third letter, such as ''lake'', or ''acknowledge'', although objectively these are three times more common. This leads people to the incorrect conclusion that ''K'' is more common at the start of words. In another experiment, subjects heard the names of many celebrities, roughly equal numbers of whom were male and female. The subjects were then asked whether the list of names included more men or more women. When the men in the list were more famous, a great majority of subjects incorrectly thought there were more of them, and vice versa for women. Tversky and Kahneman's interpretation of these results is that judgments of proportion are based on availability, which is higher for the names of better-known people. In one experiment that occurred before the 1976 U.S. Presidential election, some participants were asked to imagine
Gerald Ford Gerald Rudolph Ford Jr. ( ; born Leslie Lynch King Jr.; July 14, 1913December 26, 2006) was an American politician who served as the 38th president of the United States from 1974 to 1977. He was the only president never to have been elected ...
winning, while others did the same for a
Jimmy Carter James Earl Carter Jr. (born October 1, 1924) is an American politician who served as the 39th president of the United States from 1977 to 1981. A member of the Democratic Party, he previously served as the 76th governor of Georgia from 1 ...
victory. Each group subsequently viewed their allocated candidate as significantly more likely to win. The researchers found a similar effect when students imagined a good or a bad season for a
college football College football (french: Football universitaire) refers to gridiron football played by teams of student athletes. It was through college football play that American football rules first gained popularity in the United States. Unlike most o ...
team. The effect of imagination on subjective likelihood has been replicated by several other researchers. A concept's availability can be affected by how recently and how frequently it has been brought to mind. In one study, subjects were given partial sentences to complete. The words were selected to activate the concept either of hostility or of kindness: a process known as '' priming''. They then had to interpret the behavior of a man described in a short, ambiguous story. Their interpretation was biased towards the emotion they had been primed with: the more priming, the greater the effect. A greater interval between the initial task and the judgment decreased the effect. Tversky and Kahneman offered the availability heuristic as an explanation for
illusory correlation In psychology, illusory correlation is the phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists. A false association may be formed because rare or novel occurren ...
s in which people wrongly judge two events to be associated with each other. They explained that people judge correlation on the basis of the ease of imagining or recalling the two events together.

## Representativeness

The representativeness heuristic is seen when people use categories, for example when deciding whether or not a person is a criminal. An individual thing has a high ''representativeness'' for a category if it is very similar to a prototype of that category. When people categorise things on the basis of representativeness, they are using the representativeness heuristic. "Representative" is here meant in two different senses: the prototype used for comparison is representative of its category, and representativeness is also a relation between that prototype and the thing being categorised. While it is effective for some problems, this heuristic involves attending to the particular characteristics of the individual, ignoring how common those categories are in the population (called the ''base rates''). Thus, people can overestimate the likelihood that something has a very rare property, or underestimate the likelihood of a very common property. This is called the base rate fallacy. Representativeness explains this and several other ways in which human judgments break the laws of probability. The representativeness heuristic is also an explanation of how people judge cause and effect: when they make these judgements on the basis of similarity, they are also said to be using the representativeness heuristic. This can lead to a bias, incorrectly finding causal relationships between things that resemble one another and missing them when the cause and effect are very different. Examples of this include both the belief that "emotionally relevant events ought to have emotionally relevant causes", and magical associative thinking.

### Representativeness of base rates

A 1973 experiment used a psychological profile of Tom W., a fictional graduate student. One group of subjects had to rate Tom's similarity to a typical student in each of nine academic areas (including Law, Engineering and Library Science). Another group had to rate how likely it is that Tom specialised in each area. If these ratings of likelihood are governed by probability, then they should resemble the base rates, i.e. the proportion of students in each of the nine areas (which had been separately estimated by a third group). If people based their judgments on probability, they would say that Tom is more likely to study Humanities than Library Science, because there are many more Humanities students, and the additional information in the profile is vague and unreliable. Instead, the ratings of likelihood matched the ratings of similarity almost perfectly, both in this study and a similar one where subjects judged the likelihood of a fictional woman taking different careers. This suggests that rather than estimating probability using base rates, subjects had substituted the more accessible attribute of similarity.

### Conjunction fallacy

When people rely on representativeness, they can fall into an error which breaks a fundamental law of
probability Probability is the branch of mathematics concerning numerical descriptions of how likely an event is to occur, or how likely it is that a proposition is true. The probability of an event is a number between 0 and 1, where, roughly speaking ...
. Tversky and Kahneman gave subjects a short character sketch of a woman called Linda, describing her as, "31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations". People reading this description then ranked the likelihood of different statements about Linda. Amongst others, these included "Linda is a bank teller", and, "Linda is a bank teller and is active in the feminist movement". People showed a strong tendency to rate the latter, more specific statement as more likely, even though a conjunction of the form "Linda is both ''X'' and ''Y''" can never be more probable than the more general statement "Linda is ''X''". The explanation in terms of heuristics is that the judgment was distorted because, for the readers, the character sketch was representative of the sort of person who might be an active feminist but not of someone who works in a bank. A similar exercise concerned Bill, described as "intelligent but unimaginative". A great majority of people reading this character sketch rated "Bill is an accountant who plays jazz for a hobby", as more likely than "Bill plays jazz for a hobby". reprinted in . Without success, Tversky and Kahneman used what they described as "a series of increasingly desperate manipulations" to get their subjects to recognise the logical error. In one variation, subjects had to choose between a logical explanation of why "Linda is a bank teller" is more likely, and a deliberately illogical
argument An argument is a statement or group of statements called premises intended to determine the degree of truth or acceptability of another statement called conclusion. Arguments can be studied from three main perspectives: the logical, the dialectic ...
which said that "Linda is a feminist bank teller" is more likely "because she resembles an active feminist more than she resembles a bank teller". Sixty-five percent of subjects found the illogical argument more convincing. Other researchers also carried out variations of this study, exploring the possibility that people had misunderstood the question. They did not eliminate the error. It has been shown that individuals with high CRT scores are significantly less likely to be subject to the conjunction fallacy. The error disappears when the question is posed in terms of frequencies. Everyone in these versions of the study recognised that out of 100 people fitting an outline description, the conjunction statement ("She is ''X'' and ''Y''") cannot apply to more people than the general statement ("She is ''X''").

### Ignorance of sample size

Tversky and Kahneman asked subjects to consider a problem about random variation. Imagining for simplicity that exactly half of the babies born in a hospital are male, the ratio will not be exactly half in every time period. On some days, more girls will be born and on others, more boys. The question was, does the likelihood of deviating from exactly half depend on whether there are many or few births per day? It is a well-established consequence of sampling theory that proportions will vary much more day-to-day when the typical number of births per day is small. However, people's answers to the problem do not reflect this fact. They typically reply that the number of births in the hospital makes no difference to the likelihood of more than 60% male babies in one day. The explanation in terms of the heuristic is that people consider only how representative the figure of 60% is of the previously given average of 50%.

### Dilution effect

Richard E. Nisbett and colleagues suggest that representativeness explains the ''dilution effect'', in which irrelevant information weakens the effect of a
stereotype In social psychology, a stereotype is a generalized belief about a particular category of people. It is an expectation that people might have about every person of a particular group. The type of expectation can vary; it can be, for exampl ...
. Subjects in one study were asked whether "Paul" or "Susan" was more likely to be assertive, given no other information than their first names. They rated Paul as more assertive, apparently basing their judgment on a gender stereotype. Another group, told that Paul's and Susan's mothers each commute to work in a bank, did not show this stereotype effect; they rated Paul and Susan as equally assertive. The explanation is that the additional information about Paul and Susan made them less representative of men or women in general, and so the subjects' expectations about men and women had a weaker effect. This means unrelated and non-diagnostic information about certain issue can make relative information less powerful to the issue when people understand the phenomenon.

### Misperception of randomness

Representativeness explains systematic errors that people make when judging the probability of random events. For example, in a sequence of coin tosses, each of which comes up heads (H) or tails (T), people reliably tend to judge a clearly patterned sequence such as HHHTTT as less likely than a less patterned sequence such as HTHTTH. These sequences have exactly the same probability, but people tend to see the more clearly patterned sequences as less representative of randomness, and so less likely to result from a random process. Tversky and Kahneman argued that this effect underlies the gambler's fallacy; a tendency to expect outcomes to even out over the short run, like expecting a
roulette Roulette is a casino game named after the French word meaning ''little wheel'' which was likely developed from the Italian game Biribi''.'' In the game, a player may choose to place a bet on a single number, various groupings of numbers, the ...
wheel to come up black because the last several throws came up red., reprinted in . They emphasised that even experts in statistics were susceptible to this illusion: in a 1971 survey of professional psychologists, they found that respondents expected samples to be overly representative of the population they were drawn from. As a result, the psychologists systematically overestimated the statistical power of their tests, and underestimated the
sample size Sample size determination is the act of choosing the number of observations or replicates to include in a statistical sample. The sample size is an important feature of any empirical study in which the goal is to make inferences about a populatio ...
needed for a meaningful test of their hypotheses.

Anchoring and adjustment is a heuristic used in many situations where people estimate a number. According to Tversky and Kahneman's original description, it involves starting from a readily available number—the "anchor"—and shifting either up or down to reach an answer that seems plausible. In Tversky and Kahneman's experiments, people did not shift far enough away from the anchor. Hence the anchor contaminates the estimate, even if it is clearly irrelevant. In one experiment, subjects watched a number being selected from a spinning "wheel of fortune". They had to say whether a given quantity was larger or smaller than that number. For instance, they might be asked, "Is the percentage of African countries which are members of the
United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmonizi ...
larger or smaller than 65%?" They then tried to guess the true percentage. Their answers correlated well with the arbitrary number they had been given. Insufficient adjustment from an anchor is not the only explanation for this effect. An alternative theory is that people form their estimates on evidence which is selectively brought to mind by the anchor. The anchoring effect has been demonstrated by a wide variety of experiments both in laboratories and in the real world. It remains when the subjects are offered money as an incentive to be accurate, or when they are explicitly told not to base their judgment on the anchor. The effect is stronger when people have to make their judgments quickly. Subjects in these experiments lack introspective awareness of the heuristic, denying that the anchor affected their estimates. Even when the anchor value is obviously random or extreme, it can still contaminate estimates. One experiment asked subjects to estimate the year of
Albert Einstein Albert Einstein ( ; ; 14 March 1879 – 18 April 1955) was a German-born Theoretical physics, theoretical physicist, widely acknowledged to be one of the greatest and most influential physicists of all time. Einstein is best known for d ...
's first visit to the United States. Anchors of 1215 and 1992 contaminated the answers just as much as more sensible anchor years. Other experiments asked subjects if the average temperature in
San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17th ...
is more or less than 558 degrees, or whether there had been more or fewer than 100,025 top ten albums by
The Beatles The Beatles were an English rock band, formed in Liverpool in 1960, that comprised John Lennon, Paul McCartney, George Harrison and Ringo Starr. They are regarded as the most influential band of all time and were integral to the develop ...
. These deliberately absurd anchors still affected estimates of the true numbers. Anchoring results in a particularly strong bias when estimates are stated in the form of a
confidence interval In frequentist statistics, a confidence interval (CI) is a range of estimates for an unknown parameter. A confidence interval is computed at a designated ''confidence level''; the 95% confidence level is most common, but other levels, such as ...
. An example is where people predict the value of a stock market index on a particular day by defining an upper and lower bound so that they are 98% confident the true value will fall in that range. A reliable finding is that people anchor their upper and lower bounds too close to their best estimate. This leads to an overconfidence effect. One much-replicated finding is that when people are 98% certain that a number is in a particular range, they are wrong about thirty to forty percent of the time. Anchoring also causes particular difficulty when many numbers are combined into a composite judgment. Tversky and Kahneman demonstrated this by asking a group of people to rapidly estimate the product 8 x 7 x 6 x 5 x 4 x 3 x 2 x 1. Another group had to estimate the same product in reverse order; 1 x 2 x 3 x 4 x 5 x 6 x 7 x 8. Both groups underestimated the answer by a wide margin, but the latter group's average estimate was significantly smaller. The explanation in terms of anchoring is that people multiply the first few terms of each product and anchor on that figure. A less abstract task is to estimate the probability that an aircraft will crash, given that there are numerous possible faults each with a likelihood of one in a million. A common finding from studies of these tasks is that people anchor on the small component probabilities and so underestimate the total. A corresponding effect happens when people estimate the probability of multiple events happening in sequence, such as an accumulator bet in horse racing. For this kind of judgment, anchoring on the individual probabilities results in an overestimation of the combined probability.

### Examples

People's valuation of goods, and the quantities they buy, respond to anchoring effects. In one experiment, people wrote down the last two digits of their
social security number In the United States, a Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act, codified as . The number is issued t ...
s. They were then asked to consider whether they would pay this number of dollars for items whose value they did not know, such as wine, chocolate, and computer equipment. They then entered an
auction An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition e ...

## Affect heuristic

" Affect", in this context, is a feeling such as fear, pleasure or surprise. It is shorter in duration than a mood, occurring rapidly and involuntarily in response to a stimulus. While reading the words "lung cancer" might generate an affect of dread, the words "mother's love" can create an affect of affection and comfort. When people use affect ("gut responses") to judge benefits or risks, they are using the affect heuristic. The affect heuristic has been used to explain why messages framed to activate emotions are more persuasive than those framed in a purely factual way.

## Others

*Control heuristic * Contagion heuristic *
Effort heuristic {{refimprove, date = October 2007 The effort heuristic is a mental rule of thumb in which the quality or worth of an object is determined from the perceived amount of effort that went into producing that object. In brief, the effort heuristic fol ...
* Familiarity heuristic * Fluency heuristic * Gaze heuristic * Hot-hand fallacy * Naive diversification * Peak–end rule * Recognition heuristic * Scarcity heuristic *
Similarity heuristic Similarity may refer to: In mathematics and computing * Similarity (geometry), the property of sharing the same shape * Matrix similarity, a relation between matrices * Similarity measure, a function that quantifies the similarity of two objects ...
* Simulation heuristic *
Social proof Social proof is a psychological and social phenomenon wherein people copy the actions of others in an attempt to undertake behavior in a given situation. The term was coined by Robert Cialdini in his 1984 book '' Influence: Science and Practice'' ...

# Theories

There are competing theories of human judgment, which differ on whether the use of heuristics is irrational. A ''cognitive laziness'' approach argues that heuristics are inevitable shortcuts given the limitations of the human brain. According to the ''natural assessments'' approach, some complex calculations are already done rapidly and automatically by the brain, and other judgments make use of these processes rather than calculating from scratch. This has led to a theory called "attribute substitution", which says that people often handle a complicated question by answering a different, related question, without being aware that this is what they are doing. A third approach argues that heuristics perform just as well as more complicated decision-making procedures, but more quickly and with less information. This perspective emphasises the "fast and frugal" nature of heuristics.

## Cognitive laziness

An ''effort-reduction framework'' proposed by Anuj K. Shah and Daniel M. Oppenheimer states that people use a variety of techniques to reduce the effort of making decisions.

## Attribute substitution

In 2002 Daniel Kahneman and
Shane Frederick Shane Frederick is a tenured professor at the Yale School of Management. He earlier worked at Massachusetts Institute of Technology. He is the creator of the cognitive reflection test, which has been found to be "predictive of the types of choic ...
proposed a process called attribute substitution which happens without conscious awareness. According to this theory, when somebody makes a judgment (of a ''target attribute'') which is computationally complex, a rather more easily calculated ''heuristic attribute'' is substituted. In effect, a difficult problem is dealt with by answering a rather simpler problem, without the person being aware this is happening. This explains why individuals can be unaware of their own biases, and why biases persist even when the subject is made aware of them. It also explains why human judgments often fail to show regression toward the mean. This substitution is thought of as taking place in the automatic ''intuitive'' judgment system, rather than the more self-aware ''reflective'' system. Hence, when someone tries to answer a difficult question, they may actually answer a related but different question, without realizing that a substitution has taken place. In 1975, psychologist
Stanley Smith Stevens Stanley Smith Stevens (November 4, 1906 – January 18, 1973) was an American psychologist who founded Harvard's Psycho-Acoustic Laboratory, studying psychoacoustics, and he is credited with the introduction of Stevens's power law. Stevens auth ...
proposed that the strength of a stimulus (e.g. the
brightness Brightness is an attribute of visual perception in which a source appears to be radiating or reflecting light. In other words, brightness is the perception elicited by the luminance of a visual target. The perception is not linear to luminance ...
of a light, the severity of a crime) is encoded by
brain cell Brain cells make up the functional tissue of the brain. The rest of the brain tissue is structural or connective called the stroma which includes blood vessels. The two main types of cells in the brain are neurons, also known as nerve cells, an ...
s in a way that is independent of
modality Modality may refer to: Humanities * Modality (theology), the organization and structure of the church, as distinct from sodality or parachurch organizations * Modality (music), in music, the subject concerning certain diatonic scales * Modalit ...
. Kahneman and Frederick built on this idea, arguing that the target attribute and heuristic attribute could be very different in nature. Kahneman and Frederick propose three conditions for attribute substitution: # The target attribute is relatively inaccessible.
Substitution is not expected to take place in answering factual questions that can be retrieved directly from memory ("What is your birthday?") or about current experience ("Do you feel thirsty now?). # An associated attribute is highly accessible.
This might be because it is evaluated automatically in normal perception or because it has been primed. For example, someone who has been thinking about their love life and is then asked how happy they are might substitute how happy they are with their love life rather than other areas. # The substitution is not detected and corrected by the reflective system.
For example, when asked "A bat and a ball together cost \$1.10. The bat costs \$1 more than the ball. How much does the ball cost?" many subjects incorrectly answer \$0.10. An explanation in terms of attribute substitution is that, rather than work out the sum, subjects parse the sum of \$1.10 into a large amount and a small amount, which is easy to do. Whether they feel that is the right answer will depend on whether they check the calculation with their reflective system. Kahneman gives an example where some Americans were offered
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
against their own death in a terrorist attack while on a trip to Europe, while another group were offered insurance that would cover death of any kind on the trip. Even though "death of any kind" includes "death in a terrorist attack", the former group were willing to pay more than the latter. Kahneman suggests that the attribute of
fear Fear is an intensely unpleasant emotion in response to perceiving or recognizing a danger or threat. Fear causes physiological changes that may produce behavioral reactions such as mounting an aggressive response or fleeing the threat. Fear ...
is being substituted for a calculation of the total risks of travel. Fear of terrorism for these subjects was stronger than a general fear of dying on a foreign trip.

## Fast and frugal

Gerd Gigerenzer and colleagues have argued that heuristics can be used to make judgments that are accurate rather than biased. According to them, heuristics are "fast and frugal" alternatives to more complicated procedures, giving answers that are just as good.

# Consequences

## Efficient decision heuristics

Warren Thorngate, a social psychologist, implemented ten simple decision rules or heuristics in a computer program. He determined how often each heuristic selected alternatives with highest-through-lowest expected value in a series of randomly-generated decision situations. He found that most of the simulated heuristics selected alternatives with highest expected value and almost never selected alternatives with lowest expected value.

## "Beautiful-is-familiar" effect

Psychologist Benoît Monin reports a series of experiments in which subjects, looking at photographs of faces, have to judge whether they have seen those faces before. It is repeatedly found that attractive faces are more likely to be mistakenly labeled as familiar. Monin interprets this result in terms of attribute substitution. The heuristic attribute in this case is a "warm glow"; a positive feeling towards someone that might either be due to their being familiar or being attractive. This interpretation has been criticised, because not all the variance in familiarity is accounted for by the attractiveness of the photograph.

## Judgments of morality and fairness

Legal scholar Cass Sunstein has argued that attribute substitution is pervasive when people reason about
moral A moral (from Latin ''morālis'') is a message that is conveyed or a lesson to be learned from a story or event. The moral may be left to the hearer, reader, or viewer to determine for themselves, or may be explicitly encapsulated in a maxim. ...
,
political Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of resources or status. The branch of social science that stu ...
or
legal Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vari ...
matters. Given a difficult, novel problem in these areas, people search for a more familiar, related problem (a "prototypical case") and apply its solution as the solution to the harder problem. According to Sunstein, the opinions of trusted political or religious authorities can serve as heuristic attributes when people are asked their own opinions on a matter. Another source of heuristic attributes is
emotion Emotions are mental states brought on by neurophysiological changes, variously associated with thoughts, feelings, behavioral responses, and a degree of pleasure or displeasure. There is currently no scientific consensus on a definition. ...
: people's moral opinions on sensitive subjects like sexuality and
human cloning Human cloning is the creation of a genetically identical copy (or clone) of a human. The term is generally used to refer to artificial human cloning, which is the reproduction of human cells and tissue. It does not refer to the natural concepti ...
may be driven by reactions such as
disgust Disgust (Middle French: ''desgouster'', from Latin ''gustus'', "taste") is an emotional response of rejection or revulsion to something potentially contagious or something considered offensive, distasteful, or unpleasant. In ''The Expression o ...
, rather than by reasoned principles. Sunstein has been challenged as not providing enough evidence that attribute substitution, rather than other processes, is at work in these cases.

## Persuasion

* * * * * * * * *

# References

* * * * * * * * * * * * , reprinted in . *