Research topic: The science of heuristics

The dominant optimization approach in economics, behavioral ecological, and many areas of the social sciences assumes near omniscient human agents. In contrast to this idealization of the decision maker, real people typically have to operate under conditions of limited time, information, and computational abilities.

Models of bounded rationality attempt to answer the question of how people search for information (see "The psychology of search") and make decisions under realistic conditions. Possibly the most important class of models of bounded rationality is that of heuristics. Heuristics are proximate mechanisms of bounded rationality that enable people to arrive at quick decisions under uncertainty, based on modest amounts of information.

We have developed and investigated heuristics across a wide range of tasks including the fluency heuristic (inference), the QuickEst heuristic (estimation), the priority heuristic (risky choice), the natural-mean heuristic (experience-based risky choice), and the equity heuristic (resource allocation). Using a range of methodologies, such as experimentation, computer simulation and mathematical analysis, we have also further elaborated on prominent heuristics such the take-the-best and the recognition heuristic.

Heuristics can enable people to make fast, frugal, and surprisingly accurate decisions (a) if a match exists between the structure and representation of information in actual environments and the cognitive architecture of heuristics (the heuristics' ecological rationality) and (b) if they succeed in exploiting existing mental capacities (e.g., the ability of smart forgetting). Our goal is to examine why and how heuristics can work well at the level of both games against nature (i.e., the environment is physical or technical) and social games (the environment consists of other people).

Key investigators: Ralph Hertwig & Thorsten Pachur

Key references:

• Hertwig, R., & Herzog, S. M. (2009). Fast and frugal heuristics: Tools of social rationality. Social Cognition, 27, 661–698. doi:10.1521/soco.2009.27.5.661 PDF
• Schooler, L., & Hertwig, R. (2005). How forgetting aids heuristic inference. Psychological Review, 112, 610–628. doi:10.1037/0033-295X.112.3.610 PDF