Question 3 Exam [Heuristics] Flashcards
What is Heuristics?
feelings-based decisions that are based on a person’s perception on what is good and bad rather than a logical process, done unconciously.
E.g. “GUT INSTINCT”
What is an Affect heuristic?
An exaggeration of the chance of something negative happening even if that is statistically incorrect.
What is an Availability heuristic?
When instances of an event can be imagined or recalled.
What is a Representativeness heuristic?
and what is it also known as?
If two events are similar, then people believe that the occurrence of one makes the other more likely.
e.g. someone on bus with suit and tie and briefcase = lawyer. May not be the case.
What is Anchoring heuristic?
The probability of an event is determined more by past experience (the anchor’) than by new information.
What is an Illusion of Control heuristic?
The belief that random events are under control - the ‘gambler’s fallacy’
What is Hindsight Bias?
When people exaggerate what they think they could have predicted.
E.g. knowledge that an outcome has occurred increases its perceived prior probability.
What is Desire for Certainty (Narcissism) heuristic?
“it won’t happen to me” mindset.
Example:
- Excessive interest in or admiration of oneself
- Sometimes happens for exceptionally successful CEOs
