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Heuristics are decision-making techniques that simplify the process of coming to a reasonable decision when the "perfect" decision is unreachable or unknowable. Heuristics may be understood as mental shortcuts that enable individuals to make quic...
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A rule of thumb is a principle with broad application that is not intended to be strictly accurate or reliable for every situation. 1 It is based not on theory but on practical experience. FW Taylor, who is often called "The Father of Scientif...
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Intuitive decision-making is described as the process by which information, acquired through associated learning and stored in long-term memory, is accessed unconsciously to form the basis of a judgment or decision. 1 Intuition is based on the i...
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Representativeness is the tendency to over/underestimate based on generalizations or imprecise deductive reasoning, or where certain important pieces of information are overlooked. The Representativeness heuristic is commonly used when making judg...
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Anchoring (or focalism) is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision-making, anchoring occurs when one uses an ini...
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Availability Bias is the tendency to let an example that easily comes to mind easily affect decision-making or reasoning. 1 This occurs when we overweight evidence that comes more easily to mind or is more prevalent in our memories. The study o...
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The Endowment Effect , an emotional bias, is the hypothesis that people will value something they already own more than a similar item they don’t own. This happens even when there is no cause for attachment or even if the item was only obtained li...
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A Sunk Cost is a cost that is incurred and can not be meaningfully recovered by any practical means. 1 For example, a business may have invested a million dollars in new hardware. This money is now gone and cannot be recovered, so it shouldn’t ...
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Loss aversion refers to the tendency to prefer avoiding a loss rather than acquiring an equivalent gain. This leads to risk aversion , which is when people prefer avoiding losses to making gains when they evaluate an outcome comprising similar ...
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Groupthink is a common pitfall in group decision-making and problem-solving. People feel reluctant to present alternatives, challenge others’ opinions, or express their own opinions. Conditions are ripe for Groupthink when one or more of these f...