Question

The process of judging some problem situation on the basis of its similarity with one encountered earlier, is known as
1. Anchoring heuristics
2. Heuristics of representativeness
3. Adjustment heuristics
4. Availability

Answer 1

Correct Answer - Option 2 : Heuristics of representativeness

The correct answer is Heuristics of representativeness.

• Anchoring heuristic
  • It is also known as focalism.
  • It refers to the human tendency to accept and rely on, the first piece of information received before making a decision.
  • That first piece of information is the anchor and sets the tone for everything that follows.
• Heuristics of representativeness
  • It involves estimating the likelihood of an event by comparing it to an existing prototype that already exists in our minds.
  • It is the process of judging some problem situation on the basis of its similarity with one encountered earlier.
  • It is what we think is the most relevant or typical example of a particular event or object.
  • We tend to overestimate the similarity between the two things they are comparing.
• Adjustment heuristic
  • It is when people employ a certain starting point (“the anchor”) and make adjustments until they reach an acceptable value over time.
• Availability heuristic
  • It describes our tendency to use information that comes to mind quickly and easily when making decisions about the future.
  • It can lead to bad decision-making because memories that are easily recalled are frequently insufficient for figuring out how likely things are to happen again in the future.