Heuristics

 

Heuristics

Heuristic in decision-making is the ability of making decisions based on unjustified or routine thinking. While quicker than step-by-step processing, heuristic thinking is also more likely to involve fallacies or inaccuracies.The main use for heuristics in our daily routines is to decrease the amount of evaluative thinking we perform when making simple decisions, making them instead based on unconscious rules and focusing on some aspects of the decision, while ignoring others.One example of a common and erroneous thought process that arises through heuristic thinking is the Gambler -fallcy — believing that an isolated random event is affected by previous isolated random events. For example, if a coin is flipped to tails for a couple of turns, it still has the same probability of doing so; however it seems more likely, intuitively, for it to roll heads soon This happens because, due to routine thinking, one disregards the probability and concentrates on the ratio of the outcomes, meaning that one expects that in the long run the ratio of flips should be half for each outcome. Another example is that decision-makers may be biased towards preferring moderate alternatives to extreme ones; the Compromise Effect operates under a mindset that the most moderate option carries the most benefit. In an incomplete information scenario, as in most daily decisions, the moderate option will look more appealing than either extreme, independent of the context, based only on the fact that it has characteristics that can be found at either extreme.