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Heuristics are simple rules that experts and laypeople rely on to make decisions under uncertainty as opposed to situations with calculable risk. The research program on fast‐and‐frugal heuristics studies formal models of heuristics and is motivated by Herbert Simon's seminal work on bounded rationality and satisficing. In this article, we first introduce the major theoretical principles (e.g., ecological rationality) and research approaches (e.g., competitive testing) that have been adopted in this research program, and then illustrate these principles and approaches with two heuristics: take‐the‐best and fast‐and‐frugal trees. We describe conditions under which simple heuristics predict as accurately as or better than more complex models, despite requiring less effort. We close by pointing out several issues that need to be further studied and better understood in the research on fast‐and‐frugal heuristics. [ABSTRACT FROM AUTHOR]

Intelligence evolved to cope with situations of uncertainty generated by nature, predators, and the behavior of conspecifics. To this end, humans and other animals acquired special abilities, including heuristics that allow for swift action in face of scarce information. In this article, I introduce the concept of embodied heuristics, that is, innate or learned rules of thumb that exploit evolved sensory and motor abilities in order to facilitate superior decisions. I provide a case study of the gaze heuristic, which solves coordination problems from intercepting prey to catching a fly ball. Various species have adapted this heuristic to their specific sensorimotor abilities, such as vision, echolocation, running, and flying. Humans have enlisted it for solving tasks beyond its original purpose, a process akin to exaptation. The gaze heuristic also made its way into rocket technology. I propose a systematic study of embodied heuristics as a research framework for situated cognition and embodied bounded rationality. [ABSTRACT FROM AUTHOR]

Purpose: This research explores how investment and central bankers cope with strategic uncertainty when they anticipate prices. The uncertainty originates from others' decisions and their consequences, and cannot be meaningfully reduced to risk. The authors postulate that, in order to cope with this type of uncertainty, bankers use simple rules, also called heuristics. This study aims to identify such heuristics and the psychological processes that underlie them. Design/methodology/approach: The authors interviewed 22 managers of teams tasked to anticipate prices, in two leading investment and central banks. The primary data came from in-depth, semi-structured interviews lasting 30–60 min, supplemented by our observations during the on-site visits, emails and phone calls when preparing the interviews, and reports published by the banks. Data were coded and heuristics were induced over multiple rounds by multiple researchers. Findings: Bankers (1) construct simple game representations of markets, (2) make inferences to gauge opponents, (3) become alert when they see too much agreement and (4) communicate coherent narratives. Heuristics (1)–(3) are employed when the pace of decision-making is fast, whereas (4) is used for longer time scales. In sum, bankers exhibit reciprocal bounded rationality, wherein interaction partners are mutually aware of and adapted to the fundamental uncertainty of the task and their limited resources. Originality/value: Heuristics for anticipating prices have not been studied empirically outside the lab. The findings may help integrate conceptualizations of heuristics in the simple-rules and fast-and-frugal-heuristics research programs and improve market efficiency. [ABSTRACT FROM AUTHOR]

In applied settings, such as aviation, medicine, and finance, individuals make decisions under various degrees of uncertainty, that is, when not all risks are known or can be calculated. In such situations, decisions can be made using fast-and-frugal heuristics. These are simple strategies that ignore part of the available information. In this article, we propose that the conceptual lens of fast-and-frugal heuristics is useful not only for describing but also for improving applied decision making. By exploiting features of the environment and capabilities of the decision makers, heuristics can be simple without trading off accuracy. Because decision aids based on heuristics build on how individuals make decisions, they can be adopted intuitively and used effectively. Beyond enabling accurate decisions, heuristics possess characteristics that facilitate their adaptation to varied settings. These characteristics include accessibility, speed, transparency, and cost effectiveness. Altogether, the article offers an overview of the literature on fast-and-frugal heuristics and their usefulness in diverse applied settings. [ABSTRACT FROM AUTHOR]

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Background and Objective. Denominator neglect is the focus on the number of times a target event has happened (e.g., the number of treated and nontreated patients who die) without considering the overall number of opportunities for it to happen (e.g., the overall number of treated and nontreated patients). In 2 studies, we addressed the effect of denominator neglect in problems involving treatment risk reduction where samples of treated and non-treated patients and the relative risk reduction were of different sizes. We also tested whether using icon arrays helps people take these different sample sizes into account. We especially focused on older adults, who are often more disadvantaged when making decisions about their health. Design. Study 1 was conducted on a laboratory sample using a within-subjects design; study 2 was conducted on a nonstudent sample interviewed through the Web using a between-subjects design. Outcome Measures. Accuracy of understanding risk reduction. Results. Participants often paid too much attention to numerators and insufficient attention to denominators when numerical information about treatment risk reduction was provided. Adding icon arrays to the numerical information, however, drew participants’ attention to the denominators and helped them make more accurate assessments of treatment risk reduction. Icon arrays were equally helpful to younger and older adults. Conclusions. Building on previous research showing that problems with understanding numerical information often do not reside in the mind but in the representation of the problem, the results show that icon arrays are an effective method of eliminating denominator neglect. [ABSTRACT FROM PUBLISHER]

What is the nature of moral behavior? According to the study of bounded rationality, it results not from character traits or rational deliberation alone, but from the interplay between mind and environment. In this view, moral behavior is based on pragmatic social heuristics rather than moral rules or maximization principles. These social heuristics are not good or bad per se, but solely in relation to the environments in which they are used. This has methodological implications for the study of morality: Behavior needs to be studied in social groups as well as in isolation, in natural environments as well as in labs. It also has implications for moral policy: Only by accepting the fact that behavior is a function of both mind and environmental structures can realistic prescriptive means of achieving moral goals be developed. [ABSTRACT FROM AUTHOR]