This article described three heuristics that are employed in making judgements under uncertainty: representativeness, which is usually employed when people are asked to judge the probability that an object or event A belongs to class or process B; availability of instances or scenarios, which is often employed when people are asked to assess the frequency of a class or the plausibility of a particular development; and adjustment from an anchor, which is usually employed in numerical prediction when a relevant value (...) is available. These heuristics are highly economical and usually effective, but they lead to systematic and predictable errors. A better understanding of these heuristics and of the biases to which they lead could improve judgements and decisions in situations of uncertainty. (shrink)

Classic analysis of the subject and the development of personal probability; one of the greatest controversies in modern statistcal thought.

Continuing his exploration of the organization of complexity and the science of design, this new edition of Herbert Simon's classic work on artificial ...

There is not, of course, a one-to-one relation between policy conclusions and the conclusions of positive economics; if there were, there would be no ...

This volume collects Gigerenzer's recent articles on the psychology of rationality. This volume should appeal, like the earlier volumes, to a broad mixture of cognitive psychologists, philosophers, economists, and others who study decision making.

Philosophers of science studying scientific practice often consider it a methodological requirement that their conceptualization of "model" closely connects with the understanding and use of models by practicing scientists. Occasionally, this connection has been explicitly made (Hutten 1954, Suppes 1961, Morgan and Morrison 1999, Bailer-Jones 2002, Lehtinen and Kuorikoski 2007, Kuorikoski 2007, Morgan 2012a). These studies have been dominated by a focus on the—relatively similar forms of—mathematical models in physics and economics. Yet it has become increasingly evident that the way (...) models are conceptualized is very different in some other sciences, where philosophers' accounts of models' characteristics and .. (shrink)

p. cm. — (Zeuthen lecture book series) Includes bibliographical references (p. ) and index. ISBN 0-262-18187-8 (hardcover : alk. paper). — ISBN 0-262-68100-5 (pbk. : alk. paper) 1. Decision-making. 2. Economic man. 3. Game theory. 4. Rational expectations (Economic theory) I. Title. II. Series.

This paper presents an axiomatic framework for the priority heuristic, a model of bounded rationality in Selten’s (in: Gigerenzer and Selten (eds.) Bounded rationality: the adaptive toolbox, 2001) spirit of using empirical evidence on heuristics. The priority heuristic predicts actual human choices between risky gambles well. It implies violations of expected utility theory such as common consequence effects, common ratio effects, the fourfold pattern of risk taking and the reflection effect. We present an axiomatization of a parameterized version of the (...) heuristic which generalizes the heuristic in order to account for individual differences and inconsistencies. The axiomatization uses semiorders (Luce, Econometrica 24:178–191, 1956), which have an intransitive indifference part and a transitive strict preference component. The axiomatization suggests new testable predictions of the priority heuristic and makes it easier for theorists to study the relation between heuristics and other axiomatic theories such as cumulative prospect theory. (shrink)