Related Experiment Video
Updated: Jun 16, 2025
13:04
Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
Published on: September 19, 2012
12.1K
Stochastic heuristics for decisions under risk and uncertainty
Leonidas Spiliopoulos1, Ralph Hertwig1
1Center for Adaptive Rationality, Max Planck Institute for Human Development, Berlin, Germany.
Frontiers in Psychology
|August 21, 2024
Summary
Deterministic heuristic models can be modified to include stochastic choice by adding an error mechanism. This allows for realistic choice errors, improving cognitive models of decision-making.
Area of Science:
- Cognitive Science
- Decision Making
- Computational Modeling
Background:
- Heuristic models traditionally lack free parameters, leading to deterministic outcomes.
- This deterministic nature does not account for observed stochastic choice and error in decision-making.
Purpose of the Study:
- To propose modifications to deterministic heuristic models to incorporate stochasticity.
- To introduce an error mechanism that allows for realistic choice errors.
Main Methods:
- Discussing the theoretical integration of an error mechanism into existing parameter-free heuristic models.
- Presenting and comparing different types of error mechanisms.
Main Results:
- Deterministic heuristics can be converted to stochastic counterparts by adding a single free parameter for error.
- The proposed error mechanisms retain the core parameter-free cognitive processes.
Conclusions:
- Modifying deterministic heuristics with error mechanisms enhances their ability to model real-world decision-making.
- This approach facilitates better model comparisons between heuristics and parameter-rich alternatives.
Keywords:
bounded rationalitydecision making under risk and uncertaintyerrorsmodel comparisonstochastic heuristicsMore Related Videos
09:07Experimental Research Examining How People Can Cope with Uncertainty Through Soft Haptic Sensations
Published on: September 16, 2015
9.0K
05:48The Adventures of Fundi Intervention Based on the Cognitive and Emotional Processing in Attention Deficit Hyperactive Disorder Patients
Published on: June 12, 2020
5.7K
Related Concept Videos
01:21Heuristics
83
Heuristics are problem-solving strategies that use mental shortcuts to simplify decision-making. Unlike algorithms, which must be followed precisely to achieve a correct result, heuristics offer a general problem-solving framework. They save time and energy but can sometimes lead to less rational decisions.
People often rely on heuristics when faced with an overload of information, limited time, low importance of the decision, limited information, or when a heuristic readily comes to mind. For...
People often rely on heuristics when faced with an overload of information, limited time, low importance of the decision, limited information, or when a heuristic readily comes to mind. For...
83
01:08The Availability Heuristic
5.9K
A heuristic is a general problem-solving framework (Tversky & Kahneman, 1974). You can think of these as mental shortcuts that are used to solve problems. Different types of heuristics are used in different types of situations, and the impulse to use a heuristic occurs when one of five conditions is met (Pratkanis, 1989):
5.9K
01:09Decision Making: P-value Method
5.3K
The process of hypothesis testing based on the P-value method includes calculating the P- value using the sample data and interpreting it.
First, a specific claim about the population parameter is proposed. The claim is based on the research question and is stated in a simple form. Further, an opposing statement to the claim is also stated. These statements can act as null and alternative hypotheses: a null hypothesis would be a neutral statement while the alternative hypothesis can...
First, a specific claim about the population parameter is proposed. The claim is based on the research question and is stated in a simple form. Further, an opposing statement to the claim is also stated. These statements can act as null and alternative hypotheses: a null hypothesis would be a neutral statement while the alternative hypothesis can...
5.3K
01:37Reason and Intuition
6.4K
The human brain processes information for decision-making using one of two routes: an intuitive system and a rational system (Epstein, 1994; popularized by Kahneman, 2011 as System 1 and System 2, respectively). The intuitive system is quick, impulsive, and operates with minimal effort, relying on emotions or habits to provide cues for what to do next, while the rational system is logical, analytical, deliberate, and methodical. Research in neuropsychology suggests that the...
6.4K
01:14Decision Making: Traditional Method
4.0K
The process of hypothesis testing based on the traditional method includes calculating the critical value, testing the value of the test statistic using the sample data, and interpreting these values.
First, a specific claim about the population parameter is decided based on the research question and is stated in a simple form. Further, an opposing statement to this claim is also stated. These statements can act as null and alternative hypotheses, out of which a null hypothesis would be a...
First, a specific claim about the population parameter is decided based on the research question and is stated in a simple form. Further, an opposing statement to this claim is also stated. These statements can act as null and alternative hypotheses, out of which a null hypothesis would be a...
4.0K
01:25The Anchoring-and-Adjustment Heuristic
7.2K
In order to make good decisions, we use our knowledge and our reasoning. Often, this knowledge and reasoning is sound and solid. However, sometimes, we are swayed by biases or by others manipulating a situation. For example, let’s say you and three friends wanted to rent a house and had a combined target budget of $1,600. The realtor shows you only very run-down houses for $1,600 and then shows you a very nice house for $2,000. Might you ask each person to pay more in rent to get the...
7.2K