heuristics in judgment and decision making

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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 premi ...
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 Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, with a Ph.D. in political science, whose work also influenced the fields of computer science, economics, and cognitive psychology. His prima ...
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 award ...
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 Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, with a Ph.D. in political science, whose work also influenced the fields of computer science, economics, and cognitive psychology. His prima ...
formulated one of the first models of heuristics, known as
satisficing Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term ''satisficing'', a portmanteau of ''satisfy'' and ''suffice'', was introdu ...
. 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 award ...
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 ...
'' 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 Gerd Gigerenzer (born 3 September 1947) is a German psychologist who has studied the use of bounded rationality and heuristics in decision making. Gigerenzer is director emeritus of the Center for Adaptive Behavior and Cognition (ABC) at the Max ...
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 Intuition is the ability to acquire knowledge without recourse to conscious reasoning. Different fields use the word "intuition" in very different ways, including but not limited to: direct access to unconscious knowledge; unconscious cognition ...
) 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 Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term ''satisficing'', a portmanteau of ''satisfy'' and ''suffice'', was introdu ...
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 ...
114,204 to $128,754. Anchoring and adjustment has also been shown to affect grades given to students. In one experiment, 48 teachers were given bundles of student essays, each of which had to be graded and returned. They were also given a fictional list of the students' previous grades. The mean of these grades affected the grades that teachers awarded for the essay. One study showed that anchoring affected the sentences in a fictional rape trial. The subjects were trial judges with, on average, more than fifteen years of experience. They read documents including witness testimony, expert statements, the relevant penal code, and the final pleas from the prosecution and defence. The two conditions of this experiment differed in just one respect: the prosecutor demanded a 34-month sentence in one condition and 12 months in the other; there was an eight-month difference between the average sentences handed out in these two conditions. In a similar mock trial, the subjects took the role of jurors in a civil case. They were either asked to award damages "in the range from$15 million to $50 million" or "in the range from$50 million to $150 million". Although the facts of the case were the same each time, jurors given the higher range decided on an award that was about three times higher. This happened even though the subjects were explicitly warned not to treat the requests as evidence. Assessments can also be influenced by the stimuli provided. In one review, researchers found that if a stimulus is perceived to be important or carry "weight" to a situation, that people were more likely to attribute that stimulus as heavier physically. ## Affect heuristic " Affect", in this context, is a feeling Feelings are subjective self-contained phenomenal experiences. According to the ''APA Dictionary of Psychology'', a feeling is "a self-contained phenomenal experience"; and feelings are "subjective, evaluative, and independent of the sensations ... 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 Affection or fondness is a "disposition or state of mind or body" that is often associated with a feeling or type of love. It has given rise to a number of branches of philosophy and psychology concerning emotion, disease, influence, and sta ... 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 * Familiarity heuristic * Fluency heuristic In psychology, a fluency heuristic is a mental heuristic in which, if one object is processed more fluently, faster, or more smoothly than another, the mind infers that this object has the higher value with respect to the question being considered. ... * 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 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 In statistics, regression toward the mean (also called reversion to the mean, and reversion to mediocrity) is the fact that if one sample of a random variable is extreme, the next sampling of the same random variable is likely to be closer to ... . 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 autho ... 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 luminanc ... of a light, the severity of a crime) is encoded by brain cells in a way that is independent of modality. 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 Gerd Gigerenzer (born 3 September 1947) is a German psychologist who has studied the use of bounded rationality and heuristics in decision making. Gigerenzer is director emeritus of the Center for Adaptive Behavior and Cognition (ABC) at the Max ...
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 probability theory and statistics, variance is the expectation of the squared deviation of a random variable from its population mean or sample mean. Variance is a measure of dispersion, meaning it is a measure of how far a set of numbe ...
in familiarity is accounted for by the attractiveness of the photograph.

## Judgments of morality and fairness

Legal scholar
Cass Sunstein Cass Robert Sunstein (born September 21, 1954) is an American legal scholar known for his studies of constitutional law, administrative law, environmental law, law and behavioral economics. He is also ''The New York Times'' best-selling author o ...
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 studie ...
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 definitio ...
: people's moral opinions on sensitive subjects like
sexuality Human sexuality is the way people experience and express themselves sexually. This involves biological, psychological, physical, erotic, emotional, social, or spiritual feelings and behaviors. Because it is a broad term, which has varied w ...
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 ...
, 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

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# References

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