Gigerenzer - Heuristic decision making

Question 1

Heuristics are not part of the dual systems theories

Answer 1

• Heuristics are mental shortcuts
• It works better to use heuristics in uncertain situations

Question 2

Recognition-based heuristics

Answer 2

• Recognition heuristic: if one of two alternatives is recognized and the other is not, then infer that the recognized alternastive has the hgiher value with respect to the criterion
• Fluency heuristic: if both alternatives are recognized, but one is recognized faster, then infer that this alternative has the higher value with respect to the criterion

Question 3

Recall-based heuristics

Answer 3

• These heuristics rely on memory to make judgments using a single, prominent reason, often simplifying decision-making by focusing on what stands out most.
• Take-the-Best Heuristic: Focuses on the most predictive cue or reason while ignoring others. For example, choosing a product based on the highest customer rating alone.
• Hiatus Heuristic: Decisions rely on the most relevant cue tied to a “break” or pause, such as assuming a customer who hasn’t shopped recently won’t return soon.

Question 4

Trade-off heuristics

Answer 4

• Weighs cues or alternatives equally and thus makes trade-offs (compensatory strategies)
• Tallying: ignores weights, weighing all cues equally
• Mapping model
• 1/N rule

Question 5

Key insights

Answer 5

• Hueristics can be more accurate than more complex strategies even though they process less information (less-is-more effects): in uncertain situations, heuristics are needed
• A heuristic is not good, bad, rational or irrational, its accuracy depends on the structure of the environment (ecological rationality)
• Heuristics use the brain’s natural abilities and adapt to the environment, offering a context-based alternative to fixed traits or preferences in explaining behavior.
• Decision-making in organizations typically involves heuristics because the conditions for rational models rarely hold in an uncertain world

Question 6

Weighted additive value

Answer 6

What do we need to make a fully informed decision/judgment
1. Identify all relevant info
2. Recall and store this info
3. Assessing weights of all info
4. Consider all info on alternatives
5. Select the right opinion

Question 7

When is it not possible to use the weighted additive value?

Answer 7

• When not all info is available
• When the info is too big to sore in the working memory

Question 8

Social proof

Answer 8

People tend to conform to the majority, even if you identify strongly with the reference group

Question 9

Social norm

Answer 9

• What you think that others think you should o
• People tend to respond best to norms by others in similar settings and circumstances

Question 10

Susceptibility of biases

Answer 10

• Bias blind spot: people tend to think that biases are much more prevalent in others than in themselves
• G.I Joe Bias: people think that being aware and having kowledge of nudges makes them less prone to being judged
• Individual differences in cognitive reflection: we differ in our ability to reason independently of prior/current behavior/decisions
• You’re more susceptible when you’re in a hot state

Question 11

Differences between decision under risky and uncertain situations

Answer 11

Risky: you have all the information you need so you can calculate the risk of every outcome (small world)
- Risk aversion

Uncertain: when you don’t have all the information on every outcome (large world)
- You rely on shortcuts instead

Question 12

Gigerenzer said…

Answer 12

“You can only use the weighted additive rule for mall world decisions (risk), because large world is uncertain, and you can’t predict that”

Question 13

Different perspectives on using heuristics - Kahnemann

Answer 13

• Kahneman sees heuristics as a simplification strategy that sacrifices accuracy for speed.
• Attribute substitution happens when people replace a complex question with a simpler one, but this often leads to errors because important information is ignored.
• He emphasizes that heuristics are error-prone and lead to biases, especially in situations requiring precise judgments.
• Example: Substituting a difficult probability judgment with an easier emotional reaction but getting the decision wrong.

Question 14

Different perspectives on using heuristics - Gigerenzer

Answer 14

• Gigerenzer views heuristics as adaptive tools that are highly effective in certain environments.
• He argues that using less information can often lead to better and faster decisions, especially in uncertain or complex situations.
• Heuristics are not inherently error-prone; they can be the best strategy if matched to the environment.
• Example: In an emergency room, quickly focusing on critical symptoms instead of a full-body check is both fast and correct.