Introductory (College) Psychology: Cognition and Intelligence Decision Making (Availability Heuristic, Representativeness Heuristic, Framing, Sunk Cost)

Concept Summary

• The Availability Heuristic is a cognitive bias that leads people to overestimate the importance or likelihood of information that readily comes to mind.
• The Representativeness Heuristic is a cognitive bias that causes people to judge the likelihood of an event based on how closely it resembles a typical case, rather than on the actual probabilities.
• Framing is a cognitive bias that refers to the way in which information is presented, which can influence people's decisions and perceptions.
• Sunk Cost is a concept in economics that refers to the cost of a decision that has already been made, which can influence people's decisions to continue with a course of action.
• These biases and concepts can affect decision-making in various aspects of life, including personal finance, health, and business.

Questions

WHAT (definitional)

• Question 1: What is the Availability Heuristic?
• Answer: The Availability Heuristic is a cognitive bias that leads people to overestimate the importance or likelihood of information that readily comes to mind.
• Real-world example: A person who has recently experienced a car accident may overestimate the risk of car accidents in general.
• Misconception cleared: The Availability Heuristic is not the same as the actual probability of an event.
• Question 2: What is the Representativeness Heuristic?
• Answer: The Representativeness Heuristic is a cognitive bias that causes people to judge the likelihood of an event based on how closely it resembles a typical case, rather than on the actual probabilities.
• Real-world example: A person who meets a successful entrepreneur may overestimate the likelihood of becoming a successful entrepreneur themselves.
• Misconception cleared: The Representativeness Heuristic is not a reliable way to make predictions or judgments.
• Question 3: What is Framing?
• Answer: Framing is a cognitive bias that refers to the way in which information is presented, which can influence people's decisions and perceptions.
• Real-world example: A product that is described as "90% fat-free" may be more appealing than one described as "10% fat."
• Misconception cleared: Framing is not a reflection of the actual product or service.

WHY (causal reasoning)

• Question 1: Why do people use the Availability Heuristic?
• Answer: People use the Availability Heuristic because it is a mental shortcut that allows them to make quick decisions based on readily available information.
• Real-world example: A person who is trying to decide whether to take a flight or drive to a destination may use the Availability Heuristic to overestimate the risk of car accidents.
• Misconception cleared: The Availability Heuristic is not a reliable way to make decisions.
• Question 2: Why do people use the Representativeness Heuristic?
• Answer: People use the Representativeness Heuristic because it is a way to make sense of complex information by looking for patterns and similarities.
• Real-world example: A person who is trying to decide whether to invest in a particular stock may use the Representativeness Heuristic to overestimate the likelihood of success based on the characteristics of the company.
• Misconception cleared: The Representativeness Heuristic is not a reliable way to make predictions or judgments.
• Question 3: Why is Framing important in decision-making?
• Answer: Framing is important in decision-making because it can influence people's perceptions and decisions by presenting information in a way that is more appealing or persuasive.
• Real-world example: A company that frames a product as "all-natural" may be more appealing to customers than one that frames it as "contains artificial ingredients."
• Misconception cleared: Framing is not a reflection of the actual product or service.

HOW (process/application)

• Question 1: How can people avoid using the Availability Heuristic?
• Answer: People can avoid using the Availability Heuristic by seeking out a variety of information and considering multiple perspectives.
• Real-world example: A person who is trying to decide whether to take a flight or drive to a destination may seek out information on the actual risk of car accidents and consider the benefits and drawbacks of each option.
• Misconception cleared: The Availability Heuristic is not a reliable way to make decisions.
• Question 2: How can people avoid using the Representativeness Heuristic?
• Answer: People can avoid using the Representativeness Heuristic by considering the actual probabilities and statistics of a situation.
• Real-world example: A person who is trying to decide whether to invest in a particular stock may consider the actual financial performance of the company and the market trends.
• Misconception cleared: The Representativeness Heuristic is not a reliable way to make predictions or judgments.
• Question 3: How can people avoid being influenced by Framing?
• Answer: People can avoid being influenced by Framing by seeking out objective information and considering multiple perspectives.
• Real-world example: A person who is trying to decide whether to buy a product may seek out reviews and ratings from multiple sources and consider the actual features and benefits of the product.
• Misconception cleared: Framing is not a reflection of the actual product or service.

CAN (possibility/conditions)

• Question 1: Can the Availability Heuristic be overcome?
• Answer: Yes, the Availability Heuristic can be overcome by seeking out a variety of information and considering multiple perspectives.
• Real-world example: A person who is trying to decide whether to take a flight or drive to a destination may seek out information on the actual risk of car accidents and consider the benefits and drawbacks of each option.
• Misconception cleared: The Availability Heuristic is not a reliable way to make decisions.
• Question 2: Can the Representativeness Heuristic be overcome?
• Answer: Yes, the Representativeness Heuristic can be overcome by considering the actual probabilities and statistics of a situation.
• Real-world example: A person who is trying to decide whether to invest in a particular stock may consider the actual financial performance of the company and the market trends.
• Misconception cleared: The Representativeness Heuristic is not a reliable way to make predictions or judgments.
• Question 3: Can Framing be used intentionally?
• Answer: Yes, Framing can be used intentionally to influence people's perceptions and decisions.
• Real-world example: A company may use Framing to present a product in a more appealing or persuasive way.
• Misconception cleared: Framing is not a reflection of the actual product or service.

TRUE/FALSE (misconception testing)

• Statement 1: The Availability Heuristic is a reliable way to make decisions.
• Answer: FALSE
• Real-world example: A person who uses the Availability Heuristic to decide whether to take a flight or drive to a destination may overestimate the risk of car accidents.
• Misconception cleared: The Availability Heuristic is not a reliable way to make decisions.
• Statement 2: The Representativeness Heuristic is a reliable way to make predictions or judgments.
• Answer: FALSE
• Real-world example: A person who uses the Representativeness Heuristic to decide whether to invest in a particular stock may overestimate the likelihood of success based on the characteristics of the company.
• Misconception cleared: The Representativeness Heuristic is not a reliable way to make predictions or judgments.
• Statement 3: Framing is a reflection of the actual product or service.
• Answer: FALSE
• Real-world example: A company that frames a product as "all-natural" may be using a marketing tactic to influence people's perceptions.
• Misconception cleared: Framing is not a reflection of the actual product or service.