20 February 2013

Deeper into the Bird Brain - Heuristic Judgment

Having covered most of the relevant (in my opinion) aspects of the Personality Dimension from the 4D Model of Behavior, I would like to come back to a very relevant area of behavioral and decision sciences, namely heuristic judgment.

In an earlier post - A Bird and a Computer in the Brain (Two Systems of Thinking) - I have discussed the two ways in which humans make judgments or in other words, I have described the Dual-System model of Judgment. To quickly review this, people have two ways in which they think. 

First, we have the evolutionary older System 1 (or bird brain) which makes fast judgments based on “rules of thumb”, which is effortless in terms of metabolic resources needed for its functioning, is highly intuitive and uses mostly associations. 

Second, we have the evolutionary newer System 2 (or computer brain) which makes slow judgments based on learned rules, which is effortful and uses large amounts of metabolic resources (energy); it is computational and analytical. For a more extensive description check out the post A Bird and a Computer in the Brain(Two Systems of Thinking)

I believe that understanding how the “bird brain” (system 1) works is highly relevant for understanding human behavior. I have mentioned earlier that system 1 works on “rules of thumb” which in more scientific terms are called heuristics. In a series of posts I will describe the most important ones: (1) Representativeness, (2) Availability, (3) Adjustment and anchoring, (4) Affect heuristic and (5) Halo effect.

Before starting to talk about each heuristic there are two major aspects that I would like to clarify. 

First, what is a heuristic? Somehow a lot of people talk about heuristics but very few explain what it means.

One of the definitions I have found on-line is this one: “A heuristic is a mental shortcut that allows people to solve problems and make judgments quickly and efficiently. These rule-of-thumb strategies shorten decision-making time and allow people to function without constantly stopping to think about the next course of action.” Source 

Another definition, this time from a scientific paper is the following: “A heuristic is a strategy that ignores part of the information, with the goal of making decisions more quickly, frugally, and/or accurately than more complex methods.” Gigerenzer and Gaissmaier (2011).

Taking a look at the two definitions we see that a heuristic is in essence a way of thinking that is not extensive and exhaustive. To simplify even more, a heuristic is a simple and easy way of thinking.

The most known work on heuristic judgment was done by Amos Tversky and Daniel Kahneman who have conducted the famous “heuristics and biases” research program. However, they are not the ones that have brought the topic of fast and simplistic judgment into the attention of business research. It was Herbert A. Simon who has approached heuristics in this research on problem solving. Just as a “nice to know” fact, Herbert A. Simon was the first to challenge the assumption of full rationality of humans by introducing the (realistic) concept of “bounded rationality”.

Second, is it bad to use heuristic judgment?

Now please answer the following question: “What word comes first to your mind when you hear the term “heuristic”?” … I guess it’s “bias(es)”.

A lot of research has focused on the “down-side” of heuristic judgment, mainly on the fact that heuristic judgment quite often violates the principles of rationality. The truth, however, is that overall heuristic judgment leads to good conclusions and actions.

In most instances, the outcome of heuristic judgment is not “the best possible”, but it is “good enough”.

In their paper from 2011 Gigerenzer and Gaissmaier actually make a case that in many instances heuristic judgment leads to better results than deliberate effortful reasoning.    

If we accept that humans are not meant to be perfect reasoning machines and that our goals are to survive and reproduce, I guess that “good enough” outcomes are simply good enough to fulfill these evolutionary macro-goals.

This post is documented from:

Gigerenzer, Gerd, and Wolfgang Gaissmaier (2011), "Heuristic Decision Making," Annual Review of Psychology, 62, 451–482.

Kahneman, D. (2011). Thinking, fast and slow. London: Allen Lane.

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