Making Decisions and Forming Judgments


Topic: Making Decisions and Forming Judgment

Decisions

Posted by: Patrick

Key Terms:

  • Representativeness Heuristic-- Judging the likelihood of things in terms of how well they seem to represent, or match, particular prototypes
  • Availability Heuristic-- Estimating the likelihood of events based on their availability in memory
  • Overconfidence-- The tendency to be more confident than correct – to overestimate the accuracy of one's beliefs and judgments
  • Framing-- The way an issue is posed

Summary:

A heuristic is a rule of thumb -- a rule that is generally, but not always, true that we can use to make a judgment in a situation. Thanks to the mind's automatic information processing, intuitive judgments are instantaneous.
The two heuristics identified by cognitive psychologists Tversky and Kahneman (1974): Representativeness and Availability.
Representative Heuristic: Judging a situation based on how similar the aspects are to prototypes the person holds in his or her mind. For example, a person might judge a young person more likely to commit suicide because of a prototype of the depressed adolescent when, in fact, suicide rates are not higher in younger populations.
NOTE: The 'representativeness' may lead one to ignore other relevant information.
Availability Heuristic: Judging a situation based on examples of similar situations that come to mind initially. Obviously, this heuristic may lead to incorrect conclusions due to variability in personal experience. For example, a person may judge his or her neighborhood to be more dangerous than others in the city simply because that person is more familiar with violence in that particular neighborhood than in others.
The use of these heuristics is helpfully, however it can also lead to specific problems in judgment. Overconfidence is our tendency to overestimate how accurate our judgments are.
The way we present an issue is called framing, and its effects are sometimes striking. For example, consumers respond more positively to ground beef that is 75 percent lean, rather than 25 percent fat. The information is the same, the effect is not.

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