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4. Fast and Frugal Heuristics: The Tools of Bounded Rationality

Gerd Gigerenzer

Subject Psychology

DOI: 10.1111/b.9781405157599.2007.00006.x


If you open a book on judgment and decision making, chances are that you will stumble over the following moral: Good reasoning must adhere to the laws of logic, the calculus of probability, or the maximization of expected utility; if not, there must be a cognitive or motivational flaw. Don't be taken in by this fable. Logic and probability are mathematically beautiful and elegant systems. But they do not describe how actual people – including the authors of books on decision making – reason, as the subsequent story highlights. A decision theorist from Columbia University was struggling whether to accept an offer from a rival university or to stay. His colleague took him aside and said, “Just maximize your expected utility – you always write about doing this.” Exasperated, the decision theorist responded, “Come on, this is serious.” I will introduce you to the study of cognitive heuristics: how people actually make judgments and decisions in everyday life, generally without calculating probabilities and utilities. The term heuristic is of Greek origin and means “serving to find out or discover.” In the title of his Nobel Prize-winning paper of 1905, Albert Einstein used the term heuristic to indicate an idea that he considered incomplete, due to the limits of our knowledge, but useful ( Holton, 1988 ). For the Stanford mathematician G. Polya (1954) , heuristic thinking was as ... log in or subscribe to read full text

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