We operate in an environment fraught with time pressures and information overload. The mental ability that allows us to decide and think rapidly without being burdened by overwhelming information is called heuristics, also referred to as “rules of thumb” or “cognitive shortcuts”.
Kahneman, Slovic and Tversky (1982) popularised the term ‘heuristic reasoning’ as a type of mental shortcut we use for problem solving and information processing.
These rule-of-thumb strategies shorten decision making time and allow us to function without constantly stopping to think about our next course of action.
When we are making judgements and decisions about the world around us, we like to think that we are objective, logical and capable of absorbing and evaluating all the information that is available to us. The reality is that we are often influenced by a wide variety of cognitive biases – our habitual and predictable ways of thinking that are the innate tendencies of the human mind to think, judge and behave in irrational ways.
Lets examine some of the ways we assess probabilities in everyday life, which shortcuts (heuristics) we use and the biases we succumb to in such assessments.
Confirmation bias refers to our tendency to selectively search for evidence to support our beliefs, while discounting or ignoring everything else which contradicts them. In other words, we don’t perceive circumstances objectively – we only pick out those bits of data that make us feel good because they validate our pre-existing beliefs, opinions and prejudices.
The representativeness heuristic is based on our mistaken belief that small samples resemble the population from which the sample is drawn. In other words, if presented with generic, general information) and specific information (information only pertaining to a certain case), the mind tends to ignore the former and focus on the latter.
When people are trying to make a decision, they often use an ‘anchor’ or focal point as a reference or starting point. In fact, studies have shown that people have the tendency to rely too much on the very first piece of information that is offered (the ‘anchor’) when making decisions.
The availability heuristic helps us in determining the frequency and probability of something that might happen. When we are trying to make a decision, a number of related events or situations immediately come to mind. And because those events are more readily available in our memories, we tend to assume that those situations occur more frequently than others and more accurate reflections of the real world.
Since heuristics are quickly constructed from fragments of memory, they are often biased by prior evaluations and personal preferences. By raising awareness of these sources of cognitive errors in our decision making, we can take corrective action to avoid them.