Chapter 10 Think Heuristically Risks and Benefits of

Human Decision-Making Systems • Heuristic thinking • The “Two-Systems” Approach to Human Decision Making – Reactive (System-1) Thinking – Reflective (System-2) Thinking • The Value of Each System © 2013 Pearson Education, Inc. All rights reserved.

© 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks • Individual Cognitive Heuristics – 1. Satisficing • The Satisficing Heuristic – 2. Temporizing • The Satisficing Heuristic • The Temporizing Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks – 3. Affect: “Go with your Gut” • The Affect Heuristic – 4. Simulation • The Simulation Heuristic – 5. Availability • The Availability Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks – 6. Representation • The Representation Heuristic – 7. Association • The Association Heuristic – 8. Stereotyping • The Stereotyping Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks – 9. “Us vs. Them” • The “Us vs. Them” Heuristic – 10. Power Differential • The Power Differential Heuristic – 11. Anchoring with Adjustment • The Anchoring with Adjustment Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks – 12. Illusion of Control • The Illusion of Control Heuristic – 13. Optimistic Bias • The Optimistic Bias Heuristic – 14. Hindsight Bias • The Hindsight Bias Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks – 15. Elimination by Aspect: “One Strike and You’re Out” • The Elimination by Aspect Heuristic – 16. Loss and Risk Aversion • The Loss and Risk Aversion Heuristic – 17. “All or Nothing” • The “All or Nothing” Heuristic © 2013 Pearson Education, Inc. All rights reserved.

Heuristics: Their Benefits and Risks • Heuristics in Action – Cognitive heuristics expedite our thinking by generating ideas; not necessarily reflectively – Often, cognitive heuristics work in tandem with one another – Examples © 2013 Pearson Education, Inc. All rights reserved.