Category: Heuristics
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Heuristics: Availability Pt.2
After exploring the causes and effects of the heuristic of availability, we will return to the behavioural economics study we carried out, explaining how the question we set used the availability heuristic and evaluating the results. Again, we wanted to test the heuristic of availability first-hand, and so one of the other questions in the…
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Heuristics: Availability Pt.1
As we explore this notion of heuristics, it is time to look at the availability heuristic. In this article, we will see what it is, how it works and examples of where it can take effect to cause an irrational outcome. Essentially, the heuristic of availability[1] involves using examples and ideas that you already know,…
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Heuristics: Anchoring Pt.3
This is the final segment on the anchoring heuristics – today, we will move on to look at how companies like Starbucks can detach themselves from anchors and how the minimum wage could act as a potential anchor Companies can also use this theory and practice to break free of specific anchors. One such case…
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Heuristics: Anchoring Pt.2
In the previous article, we covered the basics of the anchoring heuristic, as well as an experiment I carried out to try and prove its existence. Now, we will look at corporate uses of anchoring – how companies can use this heuristic to increase profits and sales. Although we have only explored the use of…
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Heuristics: Anchoring Pt.1
In this article, we will look at one of the main heuristics explored in behavioural economics – anchoring. We will see how it occurs, its implications and its uses over the coming articles on this topic. Anchoring when guessing involves using another concept, statistic or idea as a base reference when deciding an estimate for…
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Heuristics: What are they?
This will be one of the first articles in an ongoing series on behavioural economics, and we will begin by looking at heuristics. These are mental ‘shortcuts’ that we use to make the decision-making process easier, but can sometimes cause us to make the wrong choice – here, we will explore how they are formed,…
Economics 101 