March 4, 2014
MGT 4140- Dr. Dooley
Mid-Term Take Home Exam
Our everyday life is filled with decision-making. When making decisions or judgments whether it is the decision to go to class or the decision of what college to go to, we often use “rules of thumb” which is known as heuristics. Even though there are no guidelines or set of rules that tell us exactly how to make our day-to-day decisions, heuristics can help us in our decision-making. A heuristic is a psychological shortcut used to solve a specific problem; it is usually quick, informal, and a natural process that your brain uses to generate an approximate answer to a reasoning question. For every decision, we don't always have the resources and time to compare all the information before we make a choice, therefore heuristics are helpful in those situations, because they allow us to quickly and efficiently make sense of a complicated situation; however there are times when these mental shortcuts can fail at making a correct assessment of the situation. When our heuristics fail to make a correct judgment, it can sometimes result in a cognitive bias. Cognitive bias is the tendency to draw an incorrect assumption in a certain situation based on cognitive factors. It refers to discrimination in support of or against one group compared with another, in a way observed to be biased. Heuristics and cognitive bias differ in many ways but mostly through their application.
The representativeness heuristic is one type of heuristic that we use when making judgments. Representativeness can be defined as the tendency to judge the frequency or likelihood of an event by the extent to which it resembles the typical case. We estimate the likelihood of an event by comparing it to an existing prototype that already exists in our minds. Our prototype is what we think is the most appropriate or typical example of a specific event or object. For example, in a sequence of 10 coin tosses, I judged the sequences...