Heuristics

When faced with decision-making that requires the complex calculation of probabilities, we make use of heuristics.

Question

Does this term “heuristics” sound familiar? What is meant by this term?

Solution

A heuristic is a cognitive shortcut or rule of thumb. While heuristics might be helpful in allowing us to come up with reasonably good decisions, they can also lead us astray. Base rate neglect is an example of one general type of heuristic identified by Kahneman and Tversky. We will examine a number of other heuristics which may lead to fallacies in reasoning, starting with…