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Heuristics And Biases Illustrations Essay

1235 words - 5 pages

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 ...view middle of the document...

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...

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