Question

Criticize this discussion in one or more than two paragraph?

Behavioral Heuristics

"Heuristics are commonly defined as cognitive shortcuts or rules of thumbs that simplify decisions. They represent a process of substituting a difficult question with an easier one." (Kahneman, 2003).

Analysts or professionals in every industry have to create sets of rules of thumb to aid them in decision-making. These sets of rules of thumb could be intelligent educated guesses, trial and error methods, the use of historical data, the process of elimination, etc. The use of these sets of rules of thumb actually make decision- making easier and in most cases faster. The decision made at the time may not always be the best for the institution.

A key factor in the behavioral heuristics is anchoring or focalism. In psychology, anchoring or focalism describes the human tendency to rely too heavily on "anchor" on one trait or a piece of information when making a decisions. In decision-making therefore, there is the tendency for the decision-maker to anchor or heavily rely on prior information about what the decision is going to affect. For example, Mr. X wants to purchase a television and he's very much focused on purchasing a smart television set. This prior idea of a smart television set will in essence lead to a bias in the decision-making process. This means television with other futures and even the cost of the smart television set will not be important elements of this decision-making process.

To be able to arrive at a better decision, it is advisable to consider every information available to you about alternatives. In my example of the television set therefore, inquiring about other television sets will provide more information for one's perusal and hence a better decision at the end of the day.

Answer 1

Given the popularity of this approach, it may be surprising for some to learn the extent of criticism offered in the psychological literature of the heuristic and biases research. Many of the major investigators in the judgment and decision-making field have written negatively about this work. The heuristic strategies may produce the cost-effective decision in certain context. Hogarth (1981, p. 197). For example state “the most serious criticism is the failure to specify conditions under which people do or do not perform well.” Insufficient action has been paid to the effect of feedback between organism and environment.

The second type of criticism questions the generality of empirical results. The generalization that subjects judge according to representativeness is clearly overstated. The people know or can figure out somewhat more than what they have been credit for in the past. Thus there may have been the tendency to overstate the generality of judgemental biases.

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