Availability heuristic

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Many life decisions are affected by vividness of some information. Availability heuristics describes the inferences we make about event commonness based on the ease with which we can remember instances of that event.

Availability of vivid stories in the media biases our perceptions of frequency of events. We underestimate the likelihood of death due to e.g. lung disease while overestimating the commonness of death by war and starvation. Vivid deaths such as those resulting from civil war and famine tend to get more press coverage than common afflictions e.g. emphysema and pneumonia (that are more likely to kill exponentially).

Examples

We are asked to remove shoes at the airport security because a “shoe bomber” in 2001 attempted to ignite explosive shoes. Since then, travellers are required to remove shoes and put them through x-ray machine. Nevertheless, it is just one of the ways in which a terrorist could hide explosives on his body.

Availability bias can lead managers to make potentially destructive decisions. For instance: in performance appraisals, vivid instances of an employees behaviour (either positive or negative) will be most easily recalled from the memory. This is weighted more in the performance appraisals.

People are also more likely yo purchase insurance to protect themselves from a natural disaster that they have actually experienced than they would do otherwise. For instance: people are more likely to purchase insurance from an earthquake if they experienced one in the past. The risk of experiencing an earthquake becomes more vivid and salient after one has experienced it, even if the risk of another earthquake in the same location diminishes.

Conclusion

Our memories and recent experiences have a strong impact on our decision. We are unaware of our own mental processes and the power of influence of availability on our recollections, predictions and judgements.

Ease of recall bias shows the misuse of availability heuristics. This can lead to systematic errors in managerial judgement. We easily assume that our available recollections are truly representative of large pool of events that exist outside of our range of experience.

We need to recognise when intuition leads us away from correct actions so that we can avoid the pitfall of selecting most mentally available option.

 

Bazerman, M.H. and Moore, D.A., 1994. Judgment in managerial decision making (p. 226). New York: Wiley.

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