Biases in judgments reveal some heuristics of thinking under uncertainty
Amos Tversky and Daniel Kahneman | 1974
This article described three heuristics that are employed in making judgments under uncertainty: (i) representativeness, which is usually employed when people are asked to judge the probability that an object or event A belongs to class or process B; (ii) availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development; and (iii) adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
These heuristics are highly economical and usually effective, but they lead to systematic and predictable errors. A better understanding of these heuristics and the biases they lead to could improve judgments and decisions in situations of uncertainty.
“Many decisions are based on beliefs concerning the likelihood of uncertain events such as the outcome of an election, the guilt of a defendant, or the future value of the dollar. Occasionally, beliefs concerning uncertain events are expressed in numerical form as odds or subjective probabilities.
In general, the heuristics are quite useful, but sometimes they lead to severe and systematic errors. The subjective assessment of probability resembles the subjective assessment of physical quantities such as distance or size. These judgments are all based on data of limited validity, which are processed according to heuristic rules. However, the reliance on this rule leads to systematic errors in the estimation of distance.”
Read article (Source: TU Delft OpenCourseWare)
Bibliography
Tversky, A. and Kahneman, D. (1974) Judgment under Uncertainty: Heuristics and Biases: Biases in judgments reveal some heuristics of thinking under uncertainty. Science, Vol 185, Issue 4157, pp. 1124-1131. DOI: 10.1126/science.185.4157.1124
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