Judgement and Decision Making

Heuristics and Biases

Strategies that simplify decision-making by ignoring some information, allowing for quicker and more efficient choices.

Judgement

An assessment of the probability of an event occurring based on incomplete information.

Decision-making

The process of selecting from various options, often requiring judgement when full information is unavailable.

Base-rate information

The relative frequency of an event within a population, often ignored in judgements leading to inaccuracies.

Representativeness Heuristic

Judging the likelihood of an object or event belonging to a category based on its typicality, often ignoring base-rate information.

Conjunction Fallacy

The belief that the combination of two events is more likely than one event alone, despite it being logically impossible.

Availability Heuristic

Estimating the frequency of events based on how easily examples come to mind, often overestimating vivid events.

Affect Heuristic

Using emotional responses to influence judgements and decisions, often leading to overestimation of risks.

Anchoring-and-Adjustment Heuristic

The tendency to start from an initial value (anchor) and insufficiently adjust from it when making numerical predictions.

Dual-Process Theory

A framework suggesting human cognition involves two systems:System 1 (fast and intuitive) and System 2 (slow and analytical).

System 1

Operates quickly and automatically, relying on heuristics and often emotionally charged responses.

System 2

Slower and more deliberate, requiring cognitive effort and capable of overriding System 1 responses.

Prospect Theory

Describes decision-making under risk, emphasizing loss aversion and the influence of framing on choices.

Multi-Attribute Utility Theory

A normative model for decision-making that involves evaluating options based on weighted attributes.

Satisficing

A decision-making strategy that selects the first option meeting a minimum set of criteria rather than seeking the optimal solution.

Elimination by Aspects

A strategy where options are eliminated based on sequentially considered attributes until one remains.

Unconscious Thought Theory (UTT)

Proposes that unconscious thought is effective for complex decisions, unconstrained by conscious attention limits.

Deliberation-without-Attention Effect

The observation that unconscious thought can lead to better choices in complex situations than conscious deliberation.

Intuition

A "gut feeling" based on unconscious experience, which can be a reliable guide for decision-making when informed by relevant experience.

"Best of Both Worlds" Hypothesis

Suggests that conscious processes are better for gathering information, while unconscious processes excel at integrating it for decisions.

Recognition Heuristic

A strategy favoring recognized objects over unrecognized ones in situations of incomplete knowledge, often effective when recognition correlates with the criterion.

Less-Is-More Effect

A phenomenon where individuals with less knowledge outperform those with more knowledge in certain judgment tasks due to reliance on recognition.

Domain Specificity

The effectiveness of the recognition heuristic depends on specific domain characteristics, requiring unrecognized objects and valid recognition cues.

Ecological Rationality

The idea that heuristics are adapted to environmental structures, with their effectiveness depending on relevant correlations in a given domain.