Heuristic - Wikipedia, the free encyclopedia: "Psychology
In psychology, heuristics are simple, efficient rules of thumb which have been proposed to explain how people make decisions, come to judgments and solve problems, typically when facing complex problems or incomplete information. These rules work well under most circumstances, but in certain cases lead to systematic cognitive biases.
For instance, people may tend to perceive more expensive beers as tasting better than inexpensive ones. This finding holds true even when prices and brands are switched; putting the high price on the normally relatively inexpensive brand is enough to lead experimental participants to perceive that beer as tasting better than the beer that is normally relatively expensive. One might call this 'price implies quality' bias.
Much of the work of discovering heuristics in human decision makers was ignited by Amos Tversky and Daniel Kahneman, who shared an important influence on behavioral finance. Critics led by Gerd Gigerenzer focus on how heuristics can be used to make principally accurate judgments rather than producing cognitive biases � heuristics that are 'fast and frugal'."
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