Abstract

http://ssrn.com/abstract=1722019
 
 

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Heuristic Decision Making


Gerd Gigerenzer


Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Human Development

Wolfgang Gaissmaier


Free University of Berlin (FUB)

January 2011

Annual Review of Psychology, Vol. 62, pp. 451-482, 2011

Abstract:     
As reflected in the amount of controversy, few areas in psychology have undergone such dramatic conceptual changes in the past decade as the emerging science of heuristics. Heuristics are efficient cognitive processes, conscious or unconscious, that ignore part of the information. Because using heuristics saves effort, the classical view has been that heuristic decisions imply greater errors than do "rational" decisions as defined by logic or statistical models. However, for many decisions, the assumptions of rational models are not met, and it is an empirical rather than an a priori issue how well cognitive heuristics function in an uncertain world. To answer both the descriptive question ("Which heuristics do people use in which situations") and the prescriptive question ("When should people rely on a given heuristic rather than a complex strategy to make better judgments"), formal models are indispensable. We review research that tests formal models of heuristic inference, including in business organizations, health care, and legal institutions. This research indicates that (a) individuals and organizations often rely on simple heuristics in an adaptive way, and (b) ignoring part of the information can lead to more accurate judgments than weighting and adding all information, for instance for low predictability and small samples. The big future challenge is to develop a systematic theory of the building blocks of heuristics as well as the core capacities and environmental structures these exploit.

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Date posted: December 8, 2010  

Suggested Citation

Gigerenzer, Gerd and Gaissmaier, Wolfgang, Heuristic Decision Making (January 2011). Annual Review of Psychology, Vol. 62, pp. 451-482, 2011. Available at SSRN: http://ssrn.com/abstract=1722019 or http://dx.doi.org/10.1146/annurev-psych-120709-145346

Contact Information

Gerd Gigerenzer (Contact Author)
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Human Development ( email )
Lentzeallee 94
D-14195 Berlin
Germany
Wolfgang Gaissmaier
Free University of Berlin (FUB) ( email )
Kaiserswerther Str. 16-18
Berlin, Berlin 14195
Germany
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