- Applied Decision Making With Fast-and-Frugal Heuristics
- Journal of Applied Research in Memory and Cognition
- Volume | Issue number
- 5 | 2
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam Business School Research Institute (ABS-RI)
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.
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