Define the term heuristics, discuss the relationship between heuristics and biases, and explain at least two of the associated biases with examples. Why do people fall prey to these biases, and what is faulty about them?
What will be an ideal response?
Student answers and examples will vary but should demonstrate an understanding of the various biases associated with heuristics. There may be an opportunity to offer extra credit for students who discuss more than two biases. A sample answer follows.
Heuristics are simple, efficient, rules of thumb that allow us to make decisions more easily. However, they can also bias us toward inaccurate decisions at times. An example is the availability bias, or the tendency for people to base their judgments on information that is easier to recall. Other notable biases are:
Anchoring-the tendency to rely too heavily on one trait or piece of information when making decisions.
Framing-the tendency to make different decisions based on how a question or situation is phrased.
Representativeness-the tendency to assess the likelihood of an event by comparing it to a similar event and assuming it will be similar.
Contrast-the tendency to judge things erroneously based on a reference that is near to them.
Recency-the tendency to weigh recent events more than earlier events.
Ratio bias effect-the tendency to judge the same probability of an unlikely event as lower when the probability is presented in the form of a ratio of smaller rather than of larger numbers.
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