Numerous hidden factors influence the decisions that people make. These hidden factors, also known as heuristics, refer to the mental shortcuts that people make in order to solve problems and make judgements as quickly and easily as possible. Such strategies have developed for a reason, so that people can make decisions faster without stopping constantly to think about their next course of action. If we were to spend time carefully evaluating every decision and every situation, we would never get anything done!
In the 1970's, Daniel Kahneman and Amos Tversky identified three different kinds of heuristics: availability, representativeness, and anchoring and adjustment.
Types of Heuristics
This heuristic is involved when making decisions based on a related occurrence that comes readily to mind. Since the information pops up quickly in your, you will likely judge the event as being more common.
For example, if you are deciding to take a road trip and suddenly remember a major accident you just heard about on the news, you may decide that driving is too dangerous. You may be considering buying a dog but are reminded that your friend just got bitten; the availability heuristic will lead you to believe that dog bites are far more common than they really are.
This heuristic is involved when people make decisions by comparing something to a representative prototype. For example, when trying to decide if someone is trustworthy, you might compare aspects of that individual to someone you consider trustworthy. An petite, white-haired, old lady might remind you of your granny, so you might immediately assume that she is kind and trustworthy.
You may meet a well-dressed man who is an avid reader of English literature and assume that he has a job in education, not that he is a plumber. Because his traits match up to the mental prototype you have of a professor, the representativeness heuristic causes you to classify him as more likely to work in that profession.
Anchoring and adjustment heuristic
Anchoring and adjustment occurs when someone bases their initial ideas and responses on one point of information and makes changes based on that starting point. For example, a salesperson may start negotiations that are arguably well above the fair value but, because the high price is an anchor, the final price will tend to be higher than if the car salesman had started with a fair or low price.
The affect heuristic is another important heuristic and involves the influence of emotions during decision-making. Research has shown, for example, that people are more likely to see the advantages of making a decision, and less risks, when they are in a positive mood. Negative emotions, on the other hand, lead people to focus on the potential disadvantages or risks of a decision rather than the possible benefits.
Though heuristics can make decision-making much quicker and easier, freeing up space for other mental tasks, they can also lead people to miss critical information or act on unjust biases.
You can check out the post on Cognitive Biases for some more information!