We all take shortcuts when we are making decisions. And in those shortcuts often lie our mistakes. In this episode find out the difference between the availability and representativeness heuristics, as well as the “Take the Best“, Hindsight, and the Base Rate Neglect (Fallacy) heuristics. Lots of examples of these heuristics at work are included. Let’s face it – we all have lazy minds! Either that or we’re all too busy to try to weed through complicated statistics and probabilities. Heuristics help us make decisions fast. But are they the right ones?
Resources on Heuristics
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- Tversky, A.; Kahneman, D. (1973). “Availability: A heuristic for judging frequency and probability”. Cognitive Psychology 5 (2): 207–232.
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- Tversky, A.; Kahneman, D. (1974). “Judgment under uncertainty: Heuristics and biases”. Science 185 (4157): 1124–1131.
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- Kahneman, D. (2011) Thinking, Fast and Slow, Farrar, Straus and Giroux, ISBN 978-0374275631. (Reviewed by Freeman Dyson in New York Review of Books, 22 December 2011, pp. 40–44.)
Akhilesh Singh
June 18, 2011Good one..and the speaker’s voice is so endearing that I must say it keeps the listeners hooked on :).
Nice explanation.
Also wanted to highlight, that point 6). is missing entirely… In the video, after 5). Anchoring Heuristic, it’s directly jumped to 7). Overconfidence Heuristic.
Thanks,
Akhilesh Singh
mbritt
June 18, 2011Yea, the confusion is easy to see on this one, but the key thing you have to remember about base rate fallacy is the instructions given to the person who is doing the guessing: “If you chose someone RANDOMLY, what is probably that person’s GPA?”. If someone chooses randomly, then the best guess is always the average. Any info about the person’s personality is not relevant in this case.
seekinshadows
June 18, 2011I’m confused about base rate fallacy. If the average is 3.0 GPA and someone considers the aspects of the person applying and says they guess 3.5 GPA, how would they be ignoring the information on the individual and basing their guess off the ‘stereotype’? Wouldn’t that be reasoning based on both bits of info, considering a student who takes part in more activities is likely to do better than the ‘average’ student?