As human beings, we make multiple decisions every day. For many of those decisions, we don’t put in the effort required to evaluate an option or options carefully and consider all the pluses and minuses, but rather rely on rules of thumb or mental shortcuts called heuristics. Heuristics could be very helpful, often saving us time and effort and often result in optimal, or at least decent decisions. Sometimes, however, they could result in biases and lead to suboptimal or even terrible decisions. Researchers in psychology, politics, and marketing have studied heuristics and biases for decades. Marketers are increasingly taking advantages of consumer heuristics and biases in decision making to sell a product or convince people to vote for a specific candidate.
For example, one common heuristic that many people use is called availability heuristic, when we make a decision about probability or likelihood of something happening on the basis of how easy it would be for us to think of examples of those things happening. When asked, if more people die from shark attacks or fireworks, most people would immediately say “shark attacks”, since those receive extensive media coverage. In reality, though, many more people die from fireworks accidents than from shark attacks.Hence, it is important for us to better understand how me make decisions, so that we can make better decisions, influence others’ decisions, and resist somebody else’s influence.
This talk will review most common heuristics and biases in judgment and decision-making, analyze some common marketing techniques taking advantage of these biases, and provide recommendations on how to try and reduce their impact on decisions.