Biases

Historical Overview of Biases

Human beings make approximately 35,000 decisions a day, from what to have for breakfast to whom they can trust with personal information. The number of decisions the brain makes every moment can be exhausting. To deal with the overwhelming amount of information the brain must process, people make decisions based on probabilities and the likelihood of good or bad outcomes. Heuristics are mental shortcuts for making probability judgments that are used to make quick decisions and find solutions quickly when dealing with complex problems. In the 1960s and 1970s, Amos Tversky and Daniel Kahneman advanced the concept of heuristics and biases through their research on human judgment. Heuristics can be helpful, but they can also lead to cognitive biases that encourage inaccurate beliefs, judgments, and predictions. Because the brain processes a vast number of decisions, heuristics allow decision making, problem-solving, and judgment passing to happen as quickly as possible and with minimal mental effort. The automatic or intuitive system serves as a base for the cognitive shortcuts (heuristics) people use and is responsible for the systematic errors (biases) in our decision-making process.

One of the most common heuristics is known as availability heuristic, which acts when the possibility of an event happening is seen as more probable just because an example comes to mind readily. For example, one can consider buying insurance for natural disasters based on their recent experiences (i.e., hurricane season) or think that a policy investment is too risky just because a close friend lost chunks of their retirement investments due to the economic recession. Individuals also make similarity-based judgments using representativeness heuristic when they have context easily accessible in their memory. For example, an individual may think that global warming is nonexistent because they are experiencing an especially cold winter. An individual’s emotional state and [Page 139]feelings can lead to black-and-white thinking through affect heuristics. If an individual is feeling positive emotions, they are more likely to perceive situations as having high benefits and low risk, while if an individual is experiencing negative emotions, they are more likely to perceive situations as having few benefits and more risks. For example, if an individual is already feeling stressed due to conflicts at work, they may negatively view nuclear power, seeing few benefits and many risks.

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