Study Notes on Heuristics and Inductive Reasoning

Definition of Heuristic
- A heuristic is a rule of thumb used for decision-making that does not require deep thinking about all the details.
- It provides quick responses that may not be 100% accurate but are usually right most of the time.
Common Understanding of Heuristics
  - Heuristics function similarly to gut feelings, which provide rapid assessments of situations.
  - Example: "Would you say that your gut is right most of the time?"
    - Yes, but not every time.

The class will focus on three types of heuristics:
- Primarily on two main types (to be discussed in detail).
- Brief overview of anchoring and adjustment heuristic.

Definition
- Pertains to judging how likely an event is based on how easily examples come to mind.
Influence of Media
- Media can strongly affect perceptions of likely events.
- Types of media: news and social media platforms.
Example in Real Life
- A terrifying scenario: someone feels threatened by a situation (e.g., a perceived threat while at a Subway).
- The instinctual reaction represents a judgment based on immediate availability of information (fear, danger).

Base Rates Concept
- Refers to the frequency with which a certain event occurs in the general population.
- Example: How common is it for someone to be a teacher versus a professional basketball player? (Percentage-based thinking is important.)

Understanding the Conjunction Fallacy
- Error in thinking that two events occurring together is more likely than just one of the events occurring.
Example of Linda
- Linda is a 30-year-old woman. Comparing likelihood of whether she is a bank teller or a bank teller who is active in the feminist movement.
- Important to note that the probability of being a bank teller AND active in the feminist movement is less than just being a bank teller.
Illustration of the Point
- Analogy: The occurrence of two bullets colliding was presented as extremely rare (one in a million).
- Response: Consider how unlikely three bullets colliding would be, which illustrates conjunction fallacy better.

General Understanding of Probability
- The probability of multiple conditions occurring together reduces the overall likelihood compared to a single condition.
Mathematical Representation
  - Example: Probability of pulling a red M&M versus pulling a red M&M AND a green M&M.
  - Importance of adding conditions diminishes the outcome probability.
  - Suggested Mathematical Expression:        $P(A ext{ and } B) < P(A)$
Quick Estimation Exercise
- Students instructed to estimate outcomes without deep thought to familiarize with heuristics.