In general there are three general heuristics namely availability, representative and confirmation heuristics. They encompass eleven specific biases.
Economists claim individuals are rational decision makers. They collect a lot of information, examine all alternatives and make decisions that maximise personal satisfaction. However, we do not make decisions in…
Individuals rely on rules of thumb (heuristics) to lessen the information processing demands of making decisions.
The inferences we make about event commonness based on the ease with which we can remember instances of that event.
We are better at retrieving some subjects from our memory than other things. Individuals base judgement on commonality and easier base strategies.
People tend to ignore background information relevant to the problem such as base rate. We tend to assume that causes and consequences are related.
Simple statistics claims each event in a sequence is equally likely to occur. But individuals believe random and non-random events will balance out.
Simple statistics state that we are more likely to observe an unusual event in a small sample compared to a large one. Learn more.