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Today we'll be reviewing heuristics, specifically the representativeness heuristic.
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I want to give you a little background on heuristics first.
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Huristics are quick, sloppy, easy ways to make decisions.
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Overall, they are like rules of thumb, and that means that they're generally true, but not 100 % of the time, not always.
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Using a heuristic doesn't guarantee that you're going to get the right answer.
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When we make decisions, we don't always put a lot of emphasis on if our decisions are accurate or valid.
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Our decisions tend to be more subjective.
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We don't necessarily judge each and every outcome.
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So specifically, let's look at the representativeness heuristic.
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This refers to when we judge an event based on other events that we've experienced before.
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In other words, you judge a situation based on how similar it is to certain prototypes.
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So let's look at an example of betting on coin tosses...