Free Essay

Heuristics and Biases Illustrations

In: Business and Management

Submitted By pinguinito
Words 1216
Pages 5
Heuristics and Biases Illustrations

A heuristic is a mental shortcut used by humans when attempting to make a decision or a judgment as one may not have the needed time to think things through in a certain situation. This mental shortcut can be seen as involving cognitive stereotypes or past experiences that influence one’s present or future thoughts. Heuristics are strategies which reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations. It is also a technique to arrive at satisfactory solutions with the modest amount of processing, implying that people seek to reduce the effort associated with decision processes. Therefore, heuristics use principles of effort-reduction and simplification. Therefore, heuristics are acquired habits that might lead one to either make faulty decisions or successful ones. As human beings we opt for different kinds of heuristics, which include the following: availability heuristics, affect heuristics, anchoring heuristics and representativeness heuristics.

The representativeness heuristic is the judgment heuristic; it is the heuristic a human relies on when trying to judge a person, a phenomenon or an event based on an existing pattern in one’s mind. In our everyday life, we tend to apply few forms of representativeness heuristics. For example, last summer, I and my two friends, Sharon and Sandy went on a trip to Las Vegas. Sharon and I decided that we will not gamble. However, one night Sandy started gambling. After couple games, Sandy met back with us at the casino and told us that she had acquired a lot of money after gambling in a table and recommended that we give it a try that night. Sharon, convinced that she would be destined to the same outcome as our friend Sandy, took the decision to make it to the table and gamble. She decided to venture with all the money in her possession but she ended up losing all the amount. What happened in this specific situation was that Sharon depended on our friend’s experience which suggested the high probability of winning money; a suggestion that is far from being true primarily because when gambling, there always exists a 50/50 chance of winning. However, Sharon ignored that probability and instead she developed the judgment based on a similar experience and therefore bid all her money without thinking it through. Since the representativeness heuristic is one type of heuristic that we use when making judgments. In this particular heuristics, we estimate the likelihood of an event by comparing it to an existing prototype that already exists in our mind. Our prototype is what we think is the most relevant or typical example of a particular event or object, which in this case Sharon had the prototype of Sandy winning gambling at that same table just a few minutes ago, instead of thinking about the probability of 50/50 chance of winning.
Another example of application of heuristics in everyday life would be anchoring. The anchoring heuristic is when people place a definite number or an estimate value for something then adjust to it. This type of heuristic is mainly used in uncertain situations. Decision makers will form judgments by first anchoring to an important and accessible value and then adjust their evaluations from this value. An example of that type would be: My cousin Joseph had planned to purchase a brand new car next year. Because he was aware that he would be ready to pay for its market value then. However, one day as he was on his way to work, he noticed that the car he was aspiring to purchase was on sale. He therefore altered all plans he had previously made and decided to buy the car that same evening. Even if such sudden alteration would mean that the price of the car would have been more expensive if he decided to buy it that day instead of waiting till next year (when the price of the car would go down even more because the new model was going to come out). Anchoring proposes the idea that when we consider a decision, our mind offers disproportionate weight to the first information it receives. Anchors are often invisible and disguised, as in Joseph’s case, the sale sign grabbed his attention and convinced him to change the already set plan that he had planned before.

When time and information are limited, or the importance of a decision is considered to have minimal risk, the use of heuristics helps to arrive at quick and typically reasonable decisions, to keep us from getting mired in these frequent day to day events. Unfortunately, the human mind tends to rely on these heuristic methods which lend themselves to bias, which in turn negatively influences important decision making, and can lead to faulty or non-optimal judgments. Therefore, the resulting errors from applying heuristics are biases. Many biases are documented, namely overconfidence, confirmation trap, hindsight bias, etc. The confirmation bias refers to the tendency to selectively search for and consider information that confirms one's beliefs. It is a consequence of the way perception works. Beliefs shape expectations, which in turn shape perceptions, which then shape conclusions. Thus we see what we expect to see and conclude what we expect to conclude. People use confirmation bias to prove themselves right and hold on to beliefs that we believe to be true. Confirmation bias also helps us overlook any information that may disprove our belief. Like in the case of my friend Julia, who used to work as a bartender and had a pair of lucky jeans that she liked to wear to work. She felt that as long as she wore those jeans, she would make good money that night and it would be a good night. However, there were several nights that it did not go as well as she would have liked but because she had convinced herself that her lucky jeans were lucky, she still had that expectation of getting a good amount money and being an good night whenever she would wear them. So in this case Julia used confirmation bias to push the things that have happened at work while she was wearing the lucky jeans to the back, and only think and focus about the good things and good money she had gotten while wearing the lucky jeans. Confirmation bias is a way of thinking a particular way and pretty much having your mind set on what you believe is true. Like in this case, where in reality the lucky jeans were not actually lucky as she used to think. Instead, she had just been used confirmation bias to convince herself that they were.

These are the few examples of Heuristics and biases that I can think of for the purposes of the class. But there are many more that we apply in our day-to-day lives most of our actions could be explained with one or more heuristics or bias. So, in conclusion, heuristics can be regarded as mental shortcuts which humans make use of on a daily basis; sometimes without even noticing so. This is precisely why psychologists affirm that heuristics are subconscious habits. That said, people would watch out for them and try to avoid total reliance on heuristics or mental shortcuts when making decisions.

Similar Documents

Free Essay

Decision Heuristics

...Decision Heuristics Matt L. Bass Argosy University Online Dr. Paul Sam January 4, 2013 Abstract Managers and leaders make many business decisions on a daily basis and there are many factors that factors into how these decisions are made. From a psychological reference, heuristics are defined as a mental shortcut that describes the behavioral mechanics on how individuals solve problems and make quick and efficient decisions. Heuristics are considered proficient cognitive processes, conscious or unconscious, that ignores part of the information in making decision. This discussion examines the concept of heuristics in terms of making decisions and explaining the failure to ignore base rates, discuss the relevant factors of why associated with the decision and if the decision was framed properly to ascertain a better decision. Literature Review (Shanteau, 1989) suggested that (Kahneman and Tversky, 1982) exemplified their view of heuristics and biases as follows: "In making pre dictions and judgments under uncertainty, people do not appear to follow the calculus of chance or the statistical theory of prediction. Instead, they rely on a limited number of heuristics which sometimes yield reasonable judgments and sometimes lead to severe and systematic errors.” (Kahneman & Tversky, 1982) went on to identify three of several cognitive heuristics for risk judgments- representativeness, availability, and anchoring-and-adjustment. *......

Words: 1506 - Pages: 7

Premium Essay

Biases

...In the professional field of psychology, social biases have become an evident part of society. The United States of America has played an important part of how each individual seeks the world and portrays diverse views. Within each culture, a melting pot affect has taken place. Every individual has been brought into the world with different views and how to encounter the world’s greatest issue with prejudices, discrimination, stereotypes. Race, gender, age, ethnicity, and religion are prime examples of biases. As a reader, one may envision prejudice, discrimination, and stereotype are the same words just used in different context; however, the definitions illustrate the opposite. According to Fiske (2010), all facets of biases include category-based responses, which are directed towards other individuals (Fiske, 2010). Social biases can negatively affect an individual’s life, employment status, and outlook and quality of life. It is important to understand and research the many reasons why social biases are negative and how to conquer and modify one’s behavior to better prepare for the future. Define the concepts of prejudice, stereotyping, and discrimination According to Myers (2005), social biases are a typical occurrence in any type of group collaboration that involves negative evaluations of each group (Meyer, 2005). Many social psychologists frequently associate cognition to stereotype, affect to prejudice, and behavioral to discrimination. The first......

Words: 1161 - Pages: 5

Premium Essay

Biases and Judgment

...Biases and Judgment Karmen Burrell AIU Online MGT600-1204A-01 Unit 2 Individual Project September 2, 2012 Part One (Theoretical Framework) What are the effects of human resources outsourcing on leadership performance and employee commitment? This is a question facing every business. Although this is not a new topic of discussion there are still questions about its true effect on leadership performance and employee commitment. Outsourcing different jobs throughout a business’s many departments has been a common practice since the 1970’s. (Pence, 2010). At first the most common job/task that was outsourced was the company’s payroll but over the last decade more and more businesses are finding it more economical to outsource the majority of the jobs/tasks performed in a human resource department. (Nash, n.d.). In the following report we will discuss the variables and identify if they are dependent, independent, mediating, or moderating. The first variables needing to be discussed are the dependent or criterion variables. In this study they would be leadership performance and employee commitment. Leadership performance is always going to be present whether it is good or bad. The same can be said about employee commitment. These two variables may be influenced by other factors as to which end of the scale they will be located, but they will always be present. The second variable that needs to be discussed is the independent or predictor variable.......

Words: 2047 - Pages: 9

Premium Essay

Behavior Heuristics

...customer service representatives bilingual in Spanish. Several were hired in the next month. It did not take long before we noticed the ratio of bilingual representatives to callers. Most, spent the day speaking English with very little translation needed. The director of human resources had me investigate the situation. I was to determine why we had a need for bilingual representatives, more specifically Spanish representatives if the call mass was not evening out. I realized that the manager that had made this decision had based it upon two behavioral heuristics. She first chose Spanish because of how many employees of Spanish ethnicity worked there. When she heard representatives speaking in Spanish to each other, she assumed they were on calls. This is an example availability heuristic. She made this call based off of more easily available information. She did not perform an investigation. The second behavior heuristic is that of anchoring. That particular week when we were determining the qualifications for new hires, we had received an abnormal amount of calls from Spanish speaking citizens. This was front loaded because if you looked at the calls from the past weeks, due to our newest contract we actually had a lot more polish speaking callers. The call center manager had failed to look at numbers throughout the past quarter. She had simply made a call based off of the past week when new hirers had been discussed. To make a better decision next time, it is......

Words: 357 - Pages: 2

Premium Essay

Sunk Costs and Biases

...Sunk Costs and Biases I believe that all personal bias comes with a common set of language and behaviors that cross racial, ethnic and gender based structures. Bias is created by a real life experience and contains both a mindset and associated behavioral characteristics. Personal bias is infused in every organization through the connection of the people that provide the services. Biases result when an individual inappropriately applies a heuristic, (Bazerman and Moore, 2012). Researchers have found that people, rely on a number of simplifying strategies, or rules of thumb, when making decisions. These simplifying strategies are called heuristics. The four main heuristics are availability, confirmation, representativeness and affect. With heuristics choice making comes personal bias which is mixed with organizational bias to create another level of systemic biased behavioral impacts. In DPS we are making decisions that impact children from a biased perspective that is not always about students first. The biases range from who is invited to present to how we structure our organizational communication and problem solving processes. Embedded within organizational culture is a bias called sunk cost. Sunk cost bias is about persisting with bad decisions due to our irrational attachment to costs that we cannot recover has become so common that you can find them just about anywhere, (LiteMind). That’s the sunk......

Words: 827 - Pages: 4

Premium Essay

Illustrations in R

...Some Illustrations Concerning Time Series Analysis using R Gregor Kastner September 10, 2014 The following are illustrations of some examples from Gary Koop’s book Analysis of Economic Data (2009), 3rd edition, which is largely equivalent to his book Analysis of Financial Data. Exercise 1 (The Effect of Safety Training on Accidents, p. 127). Losses due to industrial accidents can be quite substantial in large companies. Accordingly, many companies provide safety training to their workers in an effort to reduce accidents. They are often interested in learning how effective their safety training programs are. Excel file SAFETY.xls contains safety data from a particular company collected on a monthly basis over five years (60 months) on the following variables: • Y. . . losses due to accidents (in £s per month), • X. . . hours of safety training provided to each worker per month. We import in R and plot. > > > > > > library('gdata') # needed for read.xls safety > T > > plot(training[-T], losses[-1]) lm2 |t|) (Intercept) 79221.99 1482.72 53.430 < 2e-16 *** training[-T] -368.57 71.92 -5.125 3.69e-06 *** --Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 Residual standard error: 8567 on 57 degrees of freedom Multiple R-squared: 0.3154, Adjusted R-squared: F-statistic: 26.27 on 1 and 57 DF, p-value: 3.69e-06 0.3034 q 90000 q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q q qq q q 80000 q q q q q......

Words: 2005 - Pages: 9

Free Essay

Availability Heuristic

...Availability heuristic provides us with the ability to quickly judge the likeliness of an event by the most outstanding memories we have associated with it. The Daily Show’s segment, “I Know What You Did Last Summer of the Shark” depicts how we can turn everyday occurrences into rare epidemics if the idea is influenced enough by the media or one’s own beliefs through their past memories of an event. The summer of 2001 was dubbed the “Summer of the Shark” because many new channels relentlessly covered the stories of shark attacks, making the viewer believe that sharks were much more dangerous that summer than any other. The Daily Show pokes fun of how easy it is for people to become terrified of ‘normal occurrences’ through availability heuristics. By overweighting easy-to-imagine instances of shark attacks, death from fallen coconuts, or even stair injuries, people will often remember these vivid experiences and will judge the likelihood of these events on how available they are in their memory. Repeatedly hearing about shark attacks will cause a person to believe that shark attacks happen much more frequent then they statistically do because the false information is readily available in their memory to call upon. Thinking about it, I believe that availability heuristics often influences my behavior and the people around me. A few days ago when I was talking to my mother, I mentioned to her that I was going into the city to meet a few of my friends for dinner and I would......

Words: 470 - Pages: 2

Premium Essay

Heuristics

...James Hulmes GS1140: Problem Solving Theory Week 2: Lab Professor R. Cornell Essay Heuristics (and intuition) plays a dominant role in the creative thinking involved in problem solving. They are so widely used and relied upon that for decades and heuristics has been searched, collected, named, categorized, computerized, and taught in problem solving classes. However, they are not nearly as generally accepted, as are algorithms, in the scaling phase of problem solving. This, I think, is due in part to a misunderstanding leading to unrealistic expectations of heuristics, or how it may be regarded that they are used. Heuristics are often referred to as techniques for finding conceptual solutions and inventive ones at that. Henceforth, they may be incorrectly thought of as algorithms for formulated production of ideas from the (intractable) subconscious. Nonetheless, heuristics are gaining recognition, as methodologies that explicitly use them are becoming known. Heuristic is a structured approach, or algorithm, that consists of five steps: define goals and opportunities, map the process or system, express impact of each step or element, link each impact back to each goal, and organize and consolidate statements. Objectives must be clearly stated when defining goals and opportunities. It’s a process metric that needs improvements. There is functionality that needs to be integrated into the current system or process. There is an undesirable effect to be reduced or......

Words: 870 - Pages: 4

Free Essay

Data and Biases

...for non-response is correlated to the issue under scrutiny. No one understands the biased sampling that results from non-responses better than census takers and the analysts who interpret the data. In 1990, more than one third of the households that were mailed census forms did not complete and return them. When this transpires, the Census Bureau dispenses someone to the non-respondent’s home. Even with this degree of diligence, the Census Bureau was not able to connect with one out of every five of the non-respondents. Selection bias may transpire designation of the study population. The ideal study population is clearly accessible, defined, and reliable. When a study population is designated, selection biases happens when the criteria used to enlist and enroll participants into separate study panels At first glance, this number may not seem significant. In 1990 the population was 250 million and approximately 62.5 million census forms were mailed out. Thirty five percent or 21.875 million households did not return the forms and of those , census takers could not locate and/or contact 4.375 million households. Political theorists have asserted that the majority of these were from poorer sections of large cities. This apparent biased sampling suggests that some parts of the country are over-represented in Congress and are the beneficiaries of more federal funding than they may be entitled. Sampling......

Words: 1515 - Pages: 7

Free Essay

Heuristics in Judgements and Decision Making

...Samantha Obery Judgment and Decision Making How could the representativeness heuristic become a problem in recruiting and hiring decisions? And what might be an effective remedy? (Be sure to address both parts of the assignment.) Heuristics are cognitive shortcuts that we use, as they require less mental administration for the purpose of information processing. The representativeness heuristic is a cognitive evaluation of the probability derived from the resemblance between an event A and B. It is the premise of this paper to show that the representative heuristic often proves helpful in our daily decision-making, however we demonstrate that our over reliance on the representative heuristic can lead to the perpetuation of systemic biases. The discussion then proposes pragmatic cognitive process such as the role of attention, consequence evaluation and base rate sourcing for the purpose cognitive self-monitoring. Given that the recruitment process is important, we should examine to what extent the representative heuristic affects this operational process. By nature the recruitment process preempts reliance on heuristics. A well-poised female candidate is being interviewed. The recruiter already visualizes her favorably within in the office. Although her CV identifies her as being married for 9 years, the interviewer asks the question anyway, expecting an answer along the lines of, “my husband is wonderful, he really is a family man”. Instead, the interviewer hears......

Words: 694 - Pages: 3

Premium Essay

Illustration of Pride

...Composition and Literary Interpretation 21 April 2012 Illustration of Pride Pride is an individual feeling that can be connected to anything that a person feels is significant to them. “A Raisin in the Sun” is an excellent example of the illustration of pride as it paints the picture of the theme of pride differently for every character involved. The dreams of each member of the Younger family are connected to what makes them feel proud of their home, family, jobs and even their place in society. The play was named from the poem “Dream Deferred” (Booth & Mays, 2010). The poem examines the possibility of what happens when a dream does not come to fruition. The first presentation of the Younger family is a picture of poverty as the family begins the day awaking from different places in a tiny apartment and shuffling out into the main hall to fight for a turn in the shared bathroom. The apartment holds as assortment of tired, worn out furnishing that have seen much better times. This seems to be a mirror image of the family members as they come into the story. Each family member is unique and possesses a different personal quality. Ruth seems tired and weary, Travis is young and full of hope, not yet realizing his place in society and being a little naïve; Walter has a master plan to break out of the current situation but seems reckless and unprepared for his dreams. Beneatha seems to be very motivated in life as she studies to be a doctor but has a political agenda for......

Words: 738 - Pages: 3

Free Essay

Heuristic Evaluation

... With five members on our team Neilsen (1992) found that evaluators discover about 75% of the total usability problems. Our team used heuristic evaluation as the sole inspection method which could at times be a disadvantage to fully depend on. Heuristic evaluations may not scale well for complex interfaces (Slakovic & Cross, 1999). Since our team consisted of only five members, a small number of evaluators may not find most of the problems in complex interfaces, like ipl2.org, and may miss some serious problems. Also the heuristic evaluation limited each team member to only emulate the users. Actual user feedback can only be obtained by involving potential users in the heuristic evaluation. Lastly heuristic heuristic evaluations may be prone to reporting false alarms - problems that are reported that are not actual usability problems in application (Jefferies et al, 1994). Consequently these problems may not always readily suggest solutions for usability issues that are identified. To reduce the possibility of missing a major problem, our group focused on the common problems we found on the ipl2 site through each team member’s heuristic evaluation worksheet. Koyani, S., Bailey, R., Nall, J. (2004) Research-Based Web Design & Usability Guidelines. Computer Psychology. 2004 Nielsen, J. 1992. Finding usability problems through heuristic evaluation. Proceedings ACM CHI'92 Conference (Monterey, CA, May 3-7): 373-380. Jeffries, R., Miller, J. R., Wharton, C., and Uyeda...

Words: 393 - Pages: 2

Free Essay

Illustration

...Chelsea Potter Shawn Welch Eng. / Comp. 101 19 February 2012 Illustration Essay Have you ever been to Myrtle Beach, South Carolina? I go on a family vacation every summer to Myrtle Beach and enjoy many different attractions each time. There are many good site-seeing attractions in Myrtle Beach, South Carolina. The three best places to visit are: Barefoot Landing, Broadway on the Beach, and Myrtle Beach Boardwalk. Barefoot Landing is a necessary visit attraction. Barefoot Landing is a beautiful place that provides events for the whole family. There is a wide variety of shopping, dining, and entertainment for the whole family. This attraction is part of the 27-acre lake that is home to nature. Barefoot Landing is located in North Myrtle Beach. Every year my family visits Barefoot Landing at least once, if not a couple of times. It’s an experience you have to explore for yourself. One of my favorite places when I go to Myrtle Beach is Broadway at the Beach. This attraction is similar to a boardwalk that is away from the beach. At Broadway at the Beach, you find everything from handcrafted jewelry to unique souvenirs. There is so much to do at Broadway at the Beach. There is shopping, dining, bars, and attractions. All of these attractions surround Lake Broadway. The Myrtle Beach boardwalk is also another favorite place to visit. This is a new attraction to Myrtle Beach within the past 3 years. It ranges over a mile long and covers from 14th Ave to 2nd Ave. This......

Words: 389 - Pages: 2

Premium Essay

Biases

...Bias comes in many forms, including race, age, gender, and ethnicity and can be universal or location specific (Fiske, 2010). Biased individuals believe the biases they are applying to others are right without regard for the truth (Fiske). Prejudice, stereotyping, and discrimination are all somewhat similar; however, they are also very different. Each form of bias is performed by one individual or group of individuals judging another individual or group of individuals prior to obtaining factual knowledge of the individual or group (Fiske). However, each form of bias is performed with a different focus. An individual behaves in a prejudicial manner when he or she has an emotional reaction to another individual or group of individuals based on preconceived ideas about the individual or group (Fiske, 2010). For example, a White individual refusing to drink from the same water fountain as a Black individual based solely on racial bias represents prejudice by the White individual. The White individual has no factual information to support not drinking from the same water fountain; however, he or she has a preconceived idea of the Black individual and therefore refuses to use the same drinking fountain. According to Fiske (2010), stereotyping is the application of an individual’s own thoughts, beliefs, and expectations onto other individuals without first obtaining factual knowledge about the individual(s). Many times, stereotypes are created after multiple occurrences of a......

Words: 1243 - Pages: 5

Premium Essay

Social Biases

...Social Biases University of Phoenix Dr. Kinsey August 20, 2012 Social Biases In today’s society social biases can be a problem because many people may look down on another person or group. People and groups can look down on another person believing he or she is better than the other. This type of social influence that some groups may have can generate common biases. Social biases can hinder interaction between people and become very damaging to people (Fiske, 2010). “Just as aggression research reveals the basic social psychology of processes that can prove deadly, the research on bias reveals processes that are demonstrably unhealthy and sometimes deadly for both agents and targets of bias” (Fiske, 2010, p. 428). Characterizing a specific way of thinking or the way a person is being view is sometimes called bias. People’s behavior and attitude which may be influenced by judgment can be displayed as bias. Many people do not realize they are bias, because it is not common to know you the person is bias. Others may identify a person being bias but one may not realize they are bias. In this paper I will define the concept of prejudice, stereotyping, and discrimination. Explain the differences between subtle and blatant bias, and identify some common bias and ways to prevent bias in today’s society. Concept of Social Bias Social Bias is “prejudice attitudes toward particular groups, races, sexes, or religions, including the conscious or......

Words: 1305 - Pages: 6