The ultimate guide to heuristics

Ensuring that you have all the relevant information you need to make an important choice can help you reach the best decision. Yet, this isn’t always practical. Always following this rule would make it impossible to take care of your daily responsibilities. People need a way to solve problems quickly and make reliable decisions. Heuristics are one way to do this.

You probably use heuristics in your everyday life to make decisions or learn new concepts, even if you’ve never heard of the word. These mental shortcuts are processes you use to quickly make choices based on what you already know, or when you only have limited information.

Heuristics aren’t always right, but they shorten the decision-making process so people can function without needing to stop and plan out every action.

When you learn more about heuristics, you can use them more effectively in your daily life.

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Heuristics are a problem-solving technique for when traditional methods are time-consuming or fail to deliver an answer.

They are sometimes referred to as algorithms, but the comparison isn’t entirely accurate. An algorithm is a set of step-by-step instructions that lead to a reliable outcome. Heuristics are a tested and trusted method of forming an educated guess.

People rarely have time to complete thorough research before making daily decisions. Heuristics are mental processes that allow us to use the information we already know and the information we’re learning to make efficient judgments or decisions.

For example, if you already know that vehicles stop at a red traffic light, you can quickly make a decision to cross the road in front of traffic while the light is red.

However, if the choice is more complex, you might need additional information to reach a correct outcome. Although you know that vehicles stop at a red light, you need more information to understand that drivers are almost always allowed to turn right when the light is red. Without that extra information, you might not take as much care as you should when crossing the street.

What is a heuristic approach?

A heuristic approach is the process of efficiently solving a problem or making a decision based on easily available information.

Heuristic approaches are more likely to be aimed at providing a practical solution rather than a perfect one. When faced with limited time or a problem without an immediate optimal answer, a heuristic approach allows you to use experience or easily available information to find a solution.

For example, let’s say your lunch hour begins in 10 minutes. You can use information you already know or information you can learn quickly to determine the best place to eat.

Choosing the restaurant closest to your office because you can get there quickly is an option. However, if you’ve been there before, you’ll know it’s probably crowded and the service will be slow.

Instead, you might search for local restaurants to find a more efficient location. Still, you only have 10 minutes to make your choice, so you’ll need to depend on a limited number of customer reviews. You’re not entirely sure that one restaurant is the fastest, but you can make a practical decision based on the information at hand.

The concept of heuristics dates back to Ancient Greece. The term is derived from the Greek word for “to discover.” However, it was first used in the 1950s by Nobel prize-winning psychologist, Herbert Simon, as part of a study of bounded reality that focused on decision-making under confined conditions, like limited time and information.

During the 1970s, psychologists Amos Tversky and Daniel Kahneman contributed to the study of heuristics with their research on cognitive biases. This research suggested that biases influence how people think and the judgments they make. This contribution revealed an important shortfall in heuristics by pointing out the limited abilities of humans to make rational decisions.

Still, heuristics play an important role in everyday decision-making and strategies used by businesses. Some forms of heuristics are even used in machine learning (ML) and artificial intelligence (AI) when solving a problem with a step-by-step algorithm isn’t practical.

It can be said that there are many types of heuristics. The human brain relies on an array of connections to make rational decisions.

However, the three most recognized types are those used in the 1974 research paper “Judgment Under Uncertainty: Heuristics and Biases” by Tversky and Kahneman. They are as follows:

Availability

The availability heuristic describes decision-making based on how easily information comes to mind.

People remember information on different levels because some types are easier to recall for various reasons.

For example, many people decide against flying because reports of plane crashes are catastrophic and easy to remember. Even when statistics show that fatal car crashes are far more common than plane crashes, the brain’s dependence on availability results in snap decisions that aren’t always logical.

However, availability heuristics can be reliable. Easily recalled statistics about fatal vehicle crashes where drivers weren’t wearing seatbelts might convince you to always wear your seatbelt, for example.

Representativeness

The representativeness heuristic describes how people tend to group information into categories.

While the ability to categorize items allows us to recognize them, it can also result in potentially inaccurate judgments or decisions.

Let’s say you’re shopping for family seating. A quick understanding of the difference between a couch and a chair can help you make the right choice.

On the other hand, consider how you might group different people into categories. If an older man with graying hair reminds you of your grandfather, you might automatically identify him as kind and trustworthy. If you’re on a jury, you might be more likely to convict suspects who are poorly dressed or groomed.

Anchoring bias

The anchoring heuristic describes how people tend to give more value to the piece of information they receive first.

Suggesting or giving bias greatly alters our natural perspective—especially to things we’re unfamiliar with. That said, psychological anchors can shift over time, such as our collective tolerance of increased gas prices.

Kahneman and Tversky ran a study that involved spinning a wheel with the numbers 1–100. The number the wheel landed on was used as the anchor.

When the wheel landed on a number, the participants were asked to state whether the number on the wheel was higher or lower than their estimate for the percentage of African countries in the United Nations. The number on the wheel was typically close to the estimate given. One group got 10 on the wheel and had a median estimate of 25%. Another group got 65 on the wheel and their median estimate was 45%.

Heuristics allow people to make decisions without spending lots of time researching the potential risks. They can help us solve problems and learn more quickly.

A heuristic approach isn’t the act of making a random guess; it’s a method that relies on information people know or are learning.

However, when inaccurate information is introduced into the process, heuristics can lead to biases and prejudice.

As humans, it’s impossible to disregard the information we already know. And we can’t take the time to weigh every single detail to find a perfect solution for every action we take.

Imagine if you had to calculate the nutritional facts of every ingredient of every meal you eat. This time-consuming process would either take up your entire day or force you to eat the same thing all the time. Neither option would be healthy nor realistic.

However, when you understand the potential biases that can be introduced with heuristic methods, you can make more mindful decisions.

The following steps can help you avoid potential heuristics-related biases:

• Take your time. A spur-of-the-moment decision is more likely to result in mistakes because you might be under pressure or fail to consider the reasons for your choice. When possible, take some time away from the task at hand so that you can process the information.

• Consider the goal. Basing decisions on results that are in your best interest is human nature. Before making a decision, identify exactly what you’re trying to achieve.

• Avoid emotional thinking. While emotions can drive good decisions, they can also lead to irrational thinking. All too often, emotions are related to past experiences instead of the decision at hand. Take time to process your emotions and understand where they’re coming from.

• Use your decision as a starting point. A decision doesn’t have to be final. It’s a good idea to think of it as a starting point that can be adjusted based on consequences or new information.

In part, heuristics are a natural part of the way humans think. They are also a valuable tool that can be used in making vital business or life decisions and assisting emerging technology.

When you understand all the finer points of heuristics, you can use them more efficiently for accurate decision-making.