A heuristic is a mental shortcut that enables people to make quick but less-than-optimal decisions.
The benefit of heuristics is that they allow us to make fast decisions based upon approximations, fast cognitive strategies, and educated guesses. The downside is that they often lead us to come to inaccurate conclusions and make flawed decisions.
The most common examples of heuristics are the availability, representativeness, and affect heuristics. However, there are many more possible examples, as shown in the 23 listed below.
Psychologists Amos Tversky and Daniel Kahneman created the concept of heuristics in the early 1970s. They can be described in the following way:
“[They are] judgmental shortcuts that generally get us where we need to go – and quickly – but at the cost of occasionally sending us off course.”
Thus, we can see heuristics as being both positive and negative for our lives. But most interestingly, they can be leveraged in marketing situations to manipulate people’s purchasing decisions, as discussed below.
Types of Heuristics with Examples
1. Availability Heuristic
Quick Definition: Making decisions based upon information that is easily available.
We often rely upon and place greater emphasis upon information that is easily available when making decisions.
We might make a decision based solely on what we know about a topic rather than conducting deeper research in order to make a more informed decision. This causes mistakes in our thinking and leads us to make decisions that are flawed or not sufficiently thought out.
This bias is one reason why political parties try to be the last person who talks to a voter before they go into a polling booth. The newness of the information may cause someone to vote for that part because the party’s arguments are closest to the top of mind.
2. Representativeness Heuristic
Quick Definition: Making judgments based upon the similarity of one thing to its archetype. In social situations, this leads to prejudice.
We often make a snap judgment about something by placing it into a category based on its surface appearance. For example, we might see a tree and immediately assume it’s in the oak family based upon the color of its bark or size of its leaves.
In social sciences, we can also see that people make judgements about other people based upon their race, gender, class, or other aspects of their identity. In these situations, we are using stereotypes to come to snap judgements about others.
3. Affect Heuristic
Quick Definition: We often make decisions based on emotions, moods, and “gut feelings” rather than logic.
Emotions, moods, and feelings impact our thoughts. This simple fact can lead people into making emotional decisions that they may regret later on when they reflect using logic.
One affect heuristic example is the fact that we often make emotional outbursts that we regret later on. Yelling at a cashier at the shops, for example, may be followed up with regret when we reflect and realize it really wasn’t the cashier’s fault.
Similarly, shoppers make impulse purchases based on the feelings they have about the handbag or new dress. These purchases may be regretted later on when we use logic and realize we have overspent our budgets.
4. Anchoring Heuristic
Quick Definition: We often make decisions based upon a subjective anchoring point that influences all subsequent thinking on a topic.
An anchoring point is often the original piece of information that we are given. Based upon this original piece of information, all future thinking and decisions look good or bad.
An anchoring heuristic example is when a company sets the cost of their goods high before setting a discount. If a high price is set, then a discount is applied, then people would see the price as a bargain rather than high.
Similarly, if you were looking at two highly-priced products, the product that is a few dollars less than the other is seen as a good deal, even if its price is also inflated.
5. Base Rate Heuristic
Quick Definition: We neglect the base statistics in favor of other more proximate statistics when making a judgment.
Base rate neglect occurs when someone forgets the base rate, or a basic fact about information, and instead makes decisions based upon other information that they place too much importance upon.
For example, we may predict that the next person to walk into a hospital is a man if the last three people who entered were all males.
This assumption neglects the fact that 50% of all people who enter hospitals are women.
Here, we are privileging immediate information: that there appears to be a lot of men entering the hospital right now., instead of the base rate fact: that you’ve generally got a 50% chance of a woman walking into the store.
6. Absurdity Heuristic
Quick Definition: We tend to classify things that are improbably as absurd rather than giving them proper consideration.
Many people who believe themselves to be highly logical fall prey to the absurdity heuristic. This occurs when you hear a claim that is improbable, so you instantly dismiss it out of hand.
The ability to filter out absurdity has been highly useful to humans – allowing us to keep our focus on reality and not get caught up in conspiracy theories day and night.
But this becomes a problem when we dismiss things that are serious problems. For example, rejection of climate change science based on the fact that it seems extreme, or a doctor dismissing symptoms of a rare disease, are cases when absurdity bias leads us to make overly dismissive decisions.
7. Contagion Heuristic
Quick Definition: We can sometimes see people, ideas, and things as being either positively or negatively contagious despite lack of logic.
Sometimes, people will try to avoid contact with something or someone that has been the victim of bad luck. For example, a person may feel uncomfortable touching a cancer patient despite the fact they are not at all contagious.
On the positive end, we may believe lucky people will remain lucky and may even spread good luck if we spend time with them. Sometimes, this could be called the halo and horns effect.
8. Effort Heuristic
Quick Definition: Assuming the quality of something correlates with the amount of effort put into it.
We will often think something is more valuable or higher quality if it took a great deal of effort to create it. This assumption may be correct, but it doesn’t always turn out to be true.
For example, a person may spend 20 hours a day, 365 days a year, working on a startup business and it may still fail due to flaws in the business model. Another person may build a business in a week and see instant success.
Here, there is no positive correlation between effort and quality.
Nevertheless, the effort heuristic is utilized by advertisers all the time. Advertisements might talk about the amount of hours spent testing products, the research and development money put into it, and so on, in order to show that a lot of effort was put into it. The insinuation here is that the effort has led to a higher-quality product, when this is not necessarily always true.
9. Familiarity Heuristic
Quick Definition: We can often take mental shortcuts where we decide things that are most familiar to us are better than things that are less familiar.
Humans tend to see safety in the familiar and risk in the unfamiliar. In reality, familiar things may be just as risky, if not more, than unfamiliar things. Nevertheless, we know how to navigate familiar situations and therefore find them less risky.
A good example of this is travel. We may look to a country overseas and see it as potentially dangerous or scary. But, looking at data, our hometown or home city may be far more dangerous!
Similarly, we’re much more likely to die in a car crash than a plane crash. Nevertheless, fear may overcome you getting on a plane despite the fact that you didn’t put a moment’s thought into the drive to the airport.
10. Fluency Heuristic
Quick Definition: If an idea is communicated more fluently or skillfully then it is given more credence than an idea that is clumsily communicated, regardless of the merit of the idea.
The fluency with which an idea is communicated can directly impact how we perceive the idea. This mental shortcut allows us to bypass direct assessment of the merits of a case. Instead, we rely more on the charisma of the communicator.
For example, leaders with charismatic authority can often command a high vote during elections because of their ability to connect with voters moreso than their actual policy positions.
11. Gaze Heuristic
Quick Definition: Animals and humans have developed the ability to fixate on an estimated position rather than conducting complex calculations. Generally, this is in relation to motion.
The most common example of the gaze heuristic is the process humans go through to estimate where a ball will land. We don’t do all the calculations to understand trajectory and angle. Instead, we’ve developed an uncanny ability to identify where the ball will land through mental shortcuts based on previous experience.
Similarly, predatory animals can predict where their prey will flee to in order to intercept it, bats can use it during echolocation to estimate the location of obstacles, and hockey goalkeepers can use it to estimate the eventual position of a puck flying towards the goals.
12. Recognition Heuristic
Quick Definition: We assume that things we recognize have more value than things we do not recognize.
Recognition is an important facet of product marketing. Brand recognition alone can help a brand to thrive among a field of other products on a shelf.
The recognition heuristic states that we take mental shortcuts when looking at a range of options by assuming that the most recognizable option holds greater value. Thus, we assume a well-known household brand is higher-quality than a lesser-known brand.
Similarly, a study in psychology found that people assume cities whose names they recognize have larger populations than those that they don’t recognize. This assumption is based on the mental shortcut that larger cities are more likely to have recognizable names than smaller cities. This mental shortcut is often accurate, showing how heuristics can be beneficial (we call this the “less is more effect”).
13. Scarcity Heuristic
Quick Definition: When something is scarce, we see it as more valuable.
False scarcity is a widely-utilized method in marketing psychology because it encourages consumers to see a product as having greater value than it really does.
When a product is framed as being scarce, it is seen as having value because only a certain number of people can have it. As a result, people want it more.
One way marketers use false scarcity is that they create limited-time discounts. In this case, the low price is a point of scarcity. Another way they can create false scarcity is to have open and closed cart periods so the product is only available for a short period of time.
This is a heuristic because people are encouraged to bypass making cold contemplative decisions about the product and, instead, make rushed decisions based on fear of missing out.
14. Similarity Heuristic
Quick Definition: Similarity between past and present situations impacts decision-making, allowing people to bypass making objective comparisons of two alternatives.
We tend to rely on past experiences to shape future experiences. If we liked something previously, then we may seek out similar situations in the future. If we didn’t like it in the past ,then we may avoid those situations in the future.
This logic allows people to bypass a thorough assessment of something and, instead, make fast decisions based on past experience.
Marketers can take advantage of this tendency. For example, a new fast food restaurant may use colors and a menu similar to McDonald;s in order to lull consumers into seeing the restaurant as similar to their previous positive experiences at McDonald’s, and therefore more likely to give it a go.
Similarly, Netflix may show you shows and movies similar to previous ones you watched to the end, because Netflix knows that you are going to be partisan toward a similar experience to the ones you previously enjoyed.
15. Simulation Heuristic
Quick Definition: We tend to overestimate the likelihood of an event based upon how easy it is to visualize it.
If our minds are able to visualize something happening, then we overstimate its probability.
Generally, the simulation heuristic occurs in relation to regret or near misses. A great example of this is buying a lottery ticket. If you found out that someone bought a winning lottery ticket one hour after you bought your ticket, then you’d easily be able to visualize the potentiality that you had gotten stuck in traffic that day and turned up to buy the ticket an hour later.
In this example, the probability of you ever turning up to buy the lottery ticket at the right time and place remains extremely low. However, because you can so easily visualize that eventuality, it feels as if you were truly very close to winning the lottery.
16. Social Proof Heuristic
Quick Definition: We use social proof as a mental shortcut to verify the quality or veracity of something instead of investigating it ourselves.
The social proof heuristic occurs both in social norms and product marketing.
In social norms, people tend to accept something as normal, correct, or appropriate because the rest of society does.
We could imagine, for example, 200 years ago many people thought the idea of the women’s right to vote as an idea that is strange or worthy of serious critique before being implemented. There weren’t many people supportive of the idea, so it was unquestioned. Today, because women’s right to vote is a social norm, it seems absurd that anyone would take it away.
In both of the above situations, people relied on broader society’s views (i.e. social proof) as an anchoring point for their own thinking on the topic.
Similarly, in marketing, marketers often go to great lengths to get quotes from “average joes” who have used a product in order to provide social proof in their advertisements.
17. Authority Heuristic
Quick Definition: We tend to defer to authorities as a shortcut rather than doing the thinking and research ourselves.
Society is structured in such a way that we defer to authorities and experts constantly. For example, we will defer to doctors on medical issues, engineers when building bridges, and lawyers on legal issues.
It’s just impossible to go about life trying to be an expert and authority on every topic. Instead, we will need to team up with authorities to make intelligent decisions. So, this heuristic is necessary.
However, mistakes can often be made when we see a person as an authority in one topic and, therefore, assume they’re an authority in entirely unrelated topics.
18. Hot-Hand Fallacy
Quick Definition: We overestimate our chances of success after a string of recent successes.
The hot-hand fallacy assumes that successful people will continue to experience success in the future.
The phrase “hot-hand” refers to gambling where a person rolling a dice has a “hot-hand” if they keep rolling the right numbers.
But we can apply this concept to a range of other situations. For example, we can apply it to investment funds, where investors will invest in a fund if it recently saw a lot of success.
However, past success does not guarantee future results. The more important thing would be to look at their investment philosophy rather than take the mental shortcut of “if they have recently been successful, then they will be in the future, too.”
19. Occam’s Razor
Quick Definition: The assumption that the most straightforward explanation is the most accurate.
Occam’s razor refers to the preferencing of more straightforward explanations as opposed to more complex ones. One logical justification for this is that the straightforward explanation has the least possible variables where mistakes in logic can occur.
However, critics of this approach highlight that, by definition, Occam’s razor fails to contemplate all possible variables and therefore causes oversimplification of explanations. Nevertheless, invoking Occam’s razor allows people to step back from a situation and contemplate whether they have over-complicated a simple situation.
20. Naive Diversification
Quick Definition: Longer-term planning tends to involve more diversification than shorter-term planning.
Consider a situation where you are asked to purchase 5 weeks’ worth of groceries at once. In this situation, you’re more likely to buy a diverse range of fruit and vegetables for the forthcoming five weeks.
By contrast, if you were to go shopping once a week for five weeks, you’re less likely to diversify. Rather, you would buy a narrow range of products that you want in the short term.
In this example, people tend to diversify when faced with longer-term plans than shorter-term plans.
Naive diversification teaches us a lesson in business and investment. It teaches us that sometimes we are too soon to diversify when making plans because of our inability to make longer-term decisions in the shorter-term. As a result, we try to hedge by diversifying.
21. Peak–End Rule
Quick Definition: People tend to remember and pass judgment on an event based upon its most intense moment of finality rather than the average.
The peak-end rule refers to situations where the peak and end of a situation are the most important in our memories. When describing situations in the past tense, our minds shortcut to the peak and the end and fail to contemplate the other parts of the memory.
For example, a book or movie may be boring for 75% of the film, but the last 25% are excellent. You then go away and tell people how excellent it was, forgetting that there were long boring periods.
This is because our minds are most stimulated at the highly emotive parts of a situation, searing them in our memories.
This rule can be applied in vacation packages, movies, and other experince-based services where the experience is curated so the peak (and end) are highly stimulating to create a ‘wow experience’ that shapes people’s memories.
Heuristics are rules of thumb that help us make decisions quickly. They are useful in many situations, and in fact have helped us evolutionarily by filtering out bad information and making decisions quickly.
However, they can can also lead to biases and errors in our thinking. In the worst-case scenarios they can lead to stereotyping and significant social harm. The most common types of heuristics are availability heuristics, representativeness heuristics, and anchoring and adjustment.
Knowing about these biases in our thinking can help marketers to sell products and help reflective people to make better decisions by knowing when and when not to use heuristics.