Module I·Article IV·~2 min read
Heuristics: Fast Decisions and Their Cost
Cognitive Biases
Turn this article into a podcast
Pick voices, format, length — AI generates the audio
What Are Heuristics
Heuristics are mental shortcuts that allow us to make quick decisions under incomplete information. They are evolutionarily justified: in simple environments, they yield good results. In complex, unusual situations—they lead to systematic errors.
Three Fundamental Heuristics (Tversky and Kahneman)
Representativeness heuristic: we estimate probability based on how much an object “resembles” a prototype. “A shy person who loves books—more likely a librarian or a farmer?” Most say “librarian,” ignoring that there are thousands of times more farmers.
Availability heuristic: we estimate the probability of an event by how easily examples come to mind. Events that the media often report on (terrorist attacks, plane crashes) seem more likely than they really are.
Anchoring and adjustment heuristic: the starting point influences the final assessment. If you ask “is the population of Turkey more or less than 35 million?”, answers will be lower than if the anchor had been 100 million.
Heuristics in Business Decisions
In hiring: “similar to us” is the similarity heuristic. We hire people who remind us of ourselves or successful employees, ignoring objective criteria.
When evaluating startups: “charismatic founder” → availability heuristic + halo effect.
In risk management: a risk experienced recently is overestimated; a long-past risk is underestimated.
When Heuristics Are Useful
Not all heuristics are enemies. Experienced experts develop “calibrated intuition”—pattern recognition based on thousands of cases. A chess grandmaster “sees” the right move—this is a good heuristic because it is based on real experience.
The problem is applying expert heuristics in fields where there is no experience, or when the environment has changed.
Practical Assignment
Write down three decisions that you make “by intuition” in your professional activity. (1) On what experience is this intuition based? (2) To what extent does the current environment match the one in which the intuition was formed? (3) Where is the heuristic reliable, and where might it mislead?
§ Act · what next