The representativeness heuristic
misleads people when similarity and frequency diverge, and it may lead to absurd judgments.
We investigate the behavior of individuals after a loss event to observe the representativeness heuristic
in the form of the gambler's fallacy (Clotfelter and Cook, 1993).
Investor Sentiment and Overreation to Accounting Earnings: The Case of Tunisian Stock Market.
Also affected by the representativeness heuristic
is judgment, the tendency to estimate whether the situation, event, or object at hand is a member of a certain category based on how typical of the category it is perceived to be (Grether, 1980, 1992; Kahneman & Tversky; Tversky & Kahneman, 1974).
(104) Kerr argues two cognitive biases will thereby be brought into play: the representativeness heuristic
. For the representativeness heuristic
, an event is judged to be probable to the extent that it represents the essential features, so people tend to judge the probability of an event by finding a comparable known event and assuming that the probabilities will be similar (Tversky & Kahneman, 1974).
When purchasing funds, we posit that investors use a representativeness heuristic
, where recent performance is deemed overly representative of a fund manager's true ability.
Most of us will answer librarian, thereby falling for what Kahneman calls the representativeness heuristic
. It may be true that librarians tend to fit the description, but there are 20 times as many male farmers as male librarians in this country.
For instance, when a clinician sets out to prescribe a treatment to a patient, based on his experience with the particular treatment, he is likely to be influenced by the results in a similar patient he had previously treated (the representativeness heuristic
), and any (easily recalled) dramatic results with the treatment (the availability heuristic).
The conjunction error and the representativeness heuristic
. Social Cognition, 3, 266-279.
The three heuristics examined by Amir and Ganzach are the representativeness heuristic
, the anchoring and adjustment heuristic, and the leniency heuristic.