Pros And Cons Of Judgemental Heuristics

Introduction

Decisions surround us in our daily lives not matter how subtle. The way things are decided is ultimately dependent on the ways they are presented for us. For example, grocery stores, department stores, and the like, set up items in the most appealing way to attract the eye that way impulse decisions are made to purchase. If there were no knowledge of those items, the likelihood to want a specific item would be significantly reduced. Although decisions are apart of our everyday lives, some are more risky than others. Our decisions are guided by a number of strategies that help us come to solutions.

Heuristics play role in the way we make decisions. These are mental shortcuts we use to help us make a decision, such as weighing the pros and cons of a situation, the cost, differences, and the benefits we receive from a specific item. There are many other factors that we use to make decisions. Kahneman and Tversky (1973) conducted a study that investigated the way judgmental heuristics play a role in making decisions. It can be inferred that decisions are made based on the evidence that is presented to them (Kahneman & Tversky 1973).

Although our decisions may be biased based on things presented to us beforehand, there is also a level of risk that plays into our decision-making strategies. Decisions that provide certainty seem to be chosen more often than those that only have probable outcomes (Kahneman & Tversky 1979). Prospect theory gives insight into our decision making process by saying that if we are more certain about probable outcomes, we are more likely to choose them (Kahneman & Tversky 1979). Within prospect theory are effects that give insight into risk taking and risk aversive behaviors. Risk aversion is a...

... middle of paper ...

... avoid risk and ensure gain. A Chi-Square test was used to analyze data. Results were as follows: χ²(1, N = 117) = 25.86, p < .05. There was a significant difference between option A and option B. Participants, as expected, were more likely to take the certain gain and avoid risk. Eighty-six participants chose the certain gain, while thirty-one participants chose to avoid risk.

Hypothesis B was framed in the negative condition. This hypothesis predicted that participants would choose option B – this option seeks risk and avoids loss. A Chi-Square test was used to analyze data. Results were as follows: χ²(1, N = 117) = 2.47, p = .12, ns. There was no significant difference in seeking risk and avoiding loss. Participants saw no difference when they stood to avoid losing, or seek a risk. Participants chose either option the same number about the same number of times.