The contagion heuristic causes us to avoid something that is thought to be bad or contaminated.
If one brand of eggs is recalled due to a salmonella outbreak, we might avoid all eggs “just in case”.
The effort heuristic causes us to perceive objects that took a longer time to produce to be of higher quality and value.
If something took forever to create e.g. Michelangelo’s David, the Sistine Chapel, the Taj Mahal, the Great Pyramids of Giza, Petra, La Sagrada Família (still under construction) we perceive it to be much more valuable than the average building or skyscraper.
The effort heuristic even applies to small things:
- If you earn $100, it seems more valuable than if you found $100 on the street
- The harder you have to work to achieve a goal, the more you’ll value that goal when you achieve it
The familiarity heuristic is that we tend to favor the familiar over the strange.
We often equate familiarity with reliability and safety, what’s familiar can seem “right”, the safe choice.
The familiarity heuristic is the reason we like brands, products and people we’re more familiar with, it’s also why if you don’t know the answer to something, you’ll simply go with what’s more familiar.
Who do you think will win Wimbledon: Roger Federer or some guy you’ve never heard of?
The familiarity heuristic can mislead us however, just because something is more familiar, that doesn’t mean that it’s better than something unfamiliar. The known, is not necessarily better than the unknown.
The familiarity heuristic can cause us to make errors in judgement in terms of probability too. We tend to overvalue companies we’re more familiar with, and undervalue those we’re less familiar with. You’re more likely to rank Coca-Cola over ICBC, despite the fact that ICBC is a much bigger and more profitable company.
The fluency heuristic is that the easier an idea or information is to understand, the more likely it is to be accepted.
This means that given the choice of two options, one easy to understand, and one difficult to understand, you’ll tend to favor the easy one (even if the easy answer is wrong, and the difficult answer is right)
This is why it’s important to explain your ideas clearly and simply in plain English. Don’t use a $50 word when a $5 word will do. The easier your ideas are for the average person to understand, the more likely they are to be accepted, whether they’re right or not.
The naïve diversification heuristic states that when people are asked to make multiple choices at once, they tend to diversify more than when making the same type of decision sequentially.
When asked to choose five candies from a selection of ten types, people will tend to choose a variety. On the other hand, when asked to choose one candy from among ten types once a week for five weeks in a row, people are more likely to select the same one.
“Occam’s razor is the problem-solving principle that, when presented with competing hypothetical answers to a problem, one should select the one that makes the fewest assumptions.” – Wikipedia
Occam’s razor is a heuristic which favors a form of problem solving containing the fewest assumptions.
The “razor” refers to removing as many unnecessary assumptions from a hypothesis as possible, because the more assumptions there are, the more possibilities there are for error.
Occam’s razor in a nutshell: The simplest explanation is usually the correct one.
For example, which is more likely to be true:
A UFO in the sky is:
a) Aliens from another galaxy
b) A type of aircraft or drone you haven’t seen before
Paleontologists have discovered dinosaur bones in the earth because:
a) Dinosaurs once lived on the earth
b) God (or Satan) put the dinosaur bones in the earth to test the faith of Christians
A woman drowned her five children in the bathtub because:
a) God told her too
b) She is insane or schizophrenic and is hearing voices in her head
Yep, the simplest explanation is usually – but not always – the correct one.
Occam’s razor states that not only should you start with the simplest and most likely explanation, you also shouldn’t overcomplicate, or add any unnecessary extra layers to your explanation.
“Entities should not be multiplied beyond necessity.” – William of Ockham
You don’t need to say that gravity works because of the laws of physics – and invisible men – if just the laws of physics will do.
“If a thing can be done adequately by means of one, it is superfluous to do it by means of several; for we observe that nature does not employ two instruments if one suffices.” – Thomas Aquinas
It’s important to note that Occam’s razor is not an unbreakable law or rule – the simplest explanation is not always the correct one – but it usually is, therefore you should always start by asking:
“What is the simplest and most likely explanation?”
Instead of with complex or far fetched theories which are less likely.
Occam’s razor doesn’t mean you eliminate complex or far fetched theories completely, it just means you start with the simplest, most likely ones. If someone has a pounding in their head, it could be brain cancer, but let’s start off by assuming it’s a headache.
“If you have two theories that both explain the observed facts, then you should use the simplest until more evidence comes along”
Occam’s razor is also not about oversimplifying theories or excluding data or evidence, so if the simplest explanation doesn’t account for all of the available data and evidence, then it’s not the best explanation.
“Everything should be made as simple as possible, but not simpler.” – Albert Einstein
In summary: Occam’s razor is simply a good rule of thumb for thinking and problem solving for when two explanations are equally explanatory, which turns out to be right more often than not.
The peak-end rule is that we judge an experience largely based on how we felt at the most emotionally intense points (the “peak”), and at its end, instead of judging the experience as a whole. This bias of memory occurs regardless of whether the experience is pleasant or unpleasant.
The peak-end rule can apply to a movie, a vacation, a relationship – anything.
The representativeness heuristic is that we tend to judge the likelihood of someone or something belonging in a category, based on how similar it is to other members of that category.
If someone looks like a stereotypical nerd, most people are likely to assume that they work in accounting, finance, IT etc. rather than being a pro-athlete or a construction worker.
However, just because someone or something seems to fit the mold of the stereotype, that doesn’t mean that they are.
Base rate fallacy
One problem with the representativeness heuristic is that it causes people to commit the base rate fallacy.
The base rate fallacy is the tendency for people to ignore relevant statistical information, when estimating how likely an event is to happen. It can cause people to overestimate the likelihood of something very rare, or to underestimate the likelihood of something very common.
The scarcity heuristic causes us to desire and value things that are rare, limited edition, hard to find.
If there is only one of something, if it is a limited edition, or even if they stop making your favorite jeans and you know you can’t replace them, they immediately become more valuable.
Advertisers appeal to the scarcity heuristic and FOMO (fear of missing out) to convince you to buy:
“Only 5 items left”
The similarity heuristic is that we make choices and judgements of people and things in the present, based on how similar they are to something we’ve experienced in the past.
If you see an Italian restaurant that looks like your favorite one, with a similar decor, menu, prices etc. you’re likely to perceive it favorably
If you see a preview for a movie that has similar characteristics to the types of movies you’ve enjoyed in the past, you’re likely to give it a chance
The similarity heuristic is about learning from past experience, and letting lessons learnt from past experiences, guide our future choices.
However the similarity heuristic can cause us to negatively prejudge people and things, if someone reminds us of someone we don’t like (even if they’re nothing like that person) we will probably want to avoid that person, due to their similarity.
Social proof is what advertisers, influencers and the media use to mold our perception.
Most people are followers, when in doubt about what choice to make in a given situation, they follow the crowd and do what “everyone else” is doing.
Advertisers and influencers know this and that’s why they use social proof to manipulate your thinking and behavior, in order to get you to buy their products and services. Instead of trying to convince you logically to use their product or service, they show you ads and pics of celebrities and people like you (in the target demo) doing it. The line of reasoning is “If celebrity X is doing it, and if everyone else is doing it, it must be the right thing to do”.
7 types of social proof:
- Celebrity: If popular celebrities are doing or recommending something, other people will definitely copy and follow suit
- Influencers: Instagram and YouTube influencers with millions of followers can have the exact same effect
- Expert: If “9/10 Doctors agree” or some industry expert endorses a product or service people will definitely buy it
- Reviews: If your a product or service has great reviews on Amazon, eBay, Facebook, Tripadvisor, Yelp etc. people are more likely to trust it
- Social media shares: The more likes, comments, shares a particular blog article, podcast, YouTube video etc. has the more credible it seems to be
- Certification: Certifications make someone seem more credible
- Canned laughter: Sitcoms often use canned laughter to make even unfunny jokes seem funnier than they really are. Similarly late shows and talk shows instruct guests to cheer and laugh at even the slightest attempt at a joke from the host
Stereotyping is a common heuristic in which we unconsciously categorize people according to certain traits often possessed by their gender, race or culture, especially if the group is portrayed that way by Hollywood, the media, online etc.
- Asians are good at math
- Black guys are athletic
- Gays are good dressers
- Jews are good with money
- Women are emotional
- White guys can’t dance
Stereotypes are obviously not always true, however they’re often true more often than not. It isn’t for no reason that people think and say the things they do.
You probably recognise a bunch of these heuristics from your own life, you can see how common they are, we use them every day. Hopefully you can also see the errors and flaws in these mental shortcuts.
Behavioural Economics – Heuristics
In general terms, a heuristic is a method or technique that people use to help them make a decision or solve a problem more quickly. We often use the phrase rule of thumb to mean the same thing. The outcome from using the heuristic may not be perfect or optimised, but is usually “good enough”. The term was developed, along with bounded rationality and satisficing, by the cognitive scientist Herbert Simon.
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The Cynefin Framework
The Cynefin Framework is central to Cognitive Edge methods and tools. It allows executives to see things from new viewpoints, assimilate complex concepts, and address realworld problems and opportunities. Using the Cynefin framework can help executives sense which context they are in so that they can not only make better decisions but also avoid the problems that arise when their preferred management style causes them to make mistakes.
Cynefin, pronounced kuhnevin, is a Welsh word that signifies the multiple factors in our environment and our experience that influence us in ways we can never understand.
In this video, Dave Snowden introduces the Cynefin Framework with a brief explanation of its origin and evolution and a detailed discussion of its architecture and function. Details of Dave’s workshops can be found here http://cognitiveedge.com/training
Survival Heuristics: My Favorite Techniques for Avoiding Intelligence Traps – SANS CTI Summit 2018
In a 32year plus career in the Intelligence Community, Carmen Medina made many different types of intelligence mistakes and suffered the consequences of faulty thinking. But along the way she learned a thing or two, and she is now eager to share these learnings with other intelligence professionals. In an entertaining and practical talk, she will share her favorite shortcuts and intelligence process hacks to help analysts think better and communicate their findings more effectively to their clients.
Carmen Medina, Retired, CIA; Author, Rebels At Work: A Handbook for Leading Change from Within
Are we in control of our decisions? | Dan Ariely
http://www.ted.com Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (and sometimes shocking) research findings to show how we’re not as rational as we think when we make decisions.\r
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Admissible and Consistent Heuristics
Heuristic functions, Admissible Heuristics, Consistent Heuristics, Straight Line Distance, Number of misplaced tiles, Manhattan Distance
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