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Heuristics: Cognitive Failures or Impressive Life Hacks?

Updated: Sep 20, 2019

It’s often said that our brain spares too much energy – some even consider it to be lazy. However, this is not exactly the case. I not only argue that our brain’s shortcuts are pretty useful techniques, but also claim that using them wisely is the ultimate winning strategy in life.

Before we go deeper into the topic of heuristics, I ask you to stop for a second and try to answer the following question: In 2018, which city had a higher number of crimes committed, Detroit or Lexington?

Well, if you are like most people, your answer is Detroit – and you are right!

Another quick experiment, this time without an obvious answer. Think of the last time you played football (or tennis or any ball game you like). Try to remember and visualize the moment when you got close to the goal and managed to shoot on target. What happened? How did you actually make the decision about where to hit the ball’s surface with your foot and how much force your muscles should exert? Did you run complex calculations in your mind about the physics of elastically colliding bodies? Or have you just trusted your intuitions? I think you would agree – the latter gives a more accurate description.

There's something in common between your behavior during the first warm-up question and your decisions on the football field. You most probably did not consider all the variables related to the crime rates in American cities, nor the possible consequences of the change in kinetic energy of either your foot or the ball. Nevertheless, you have likely provided a correct answer and made some decent shots during the game. How does that work? 

By now, you might’ve guessed that in both cases your brain applied mental shortcuts – also known as heuristics. While hardly anyone could recall the exact population of the two cities, not to mention their respective crime rates, most of us have heard about Detroit and its bad reputation (due to the abrupt decline in living conditions that came after the outsourcing of car manufacturers). Meanwhile, you probably possess much less information about Lexington. This is a perfect example of the availability heuristic. You had 2-3 small pieces of information about Detroit, and even if they weren’t relevant to the original question, it has most likely shifted your preference towards Detroit, when the response time has come.

What are heuristics?


According to the 2002 Economics Nobel Prize Laureate, Daniel Kahneman, “a heuristic is a simple procedure [that] helps find adequate, though often imperfect, answers to difficult questions.” The brilliant German psychologist, Gerd Gigerenzer, completes the definition with the requirements that heuristics should be fast and frugal. “A heuristic is fast if it can solve a problem in a little time and frugal if it can solve it with little information.”

When do we use these shortcuts?


In general, we can roughly determine two typical situations in which we tend to use heuristics. Firstly, there are cases when we have no choice, but to rely on them. The less the available time, information, skills or other resources, the higher the chance we will use rules of thumb instead of reflective, rational reasoning and calculation. When stakes are high, and we have enough time (e.g. choosing our prospective partner or our dream home), then we certainly do not settle for heuristics; however, the vast majority of our decisions are not made under such conditions.

The second case when we use heuristics is somewhat intertwined with the first one. Using heuristics instead of slow, logical thinking can provide us with better results, if we consider not just the outcomes, but also the significantly more efficient utilization of resources. The most influential economists from the neoclassical school – who heavily criticize behavioral economics theories – usually point at second-best outcomes when using heuristics, often forgetting to appreciate the amount of resources spared during the process.

Why should we take this criticism seriously?


One cannot deny that under a wide range of circumstances, relying on heuristics may lead to unwanted results. To make things worse, many of these decisions occur when the stakes or the possible losses are not at all marginal.

We must always remember that heuristics are tools which should be used only in specific environments. As we usually don’t start cutting a tree with a fork, we also need to choose the appropriate heuristics with similar awareness. 


References:

Gigerenzer, G., 2010. Rationality for mortals: How People Cope with Uncertainty. 1st ed. New York: Oxford University Press.

Kahneman, D., 2011. Thinking Fast and Slow. 1st ed. New York: Farrar, Straus and Giroux.

Thaler, R., Sunstein C., 2008. Nudge: Improving Decisions about Health, Wealth and Happiness. New Haven: Yale University Press.

Thaler, R., 2016. Misbehaving: The Making of Behavioral Economics. New York: W. W. Norton & Company.

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