Cognitive Heuristics  Rules of thumb  “Simple rules in the mind's adaptive toolbox for making decisions with realistic mental resources.”  Cognitive Heuristics as Frames- Ways of seeing the world or problems

Troublesome Cognitive Heuristics Frames  Troublesome in the sense that accepted or unchallenged they may lead to less than optimal results.

Troublesome Cognitive Heuristics Frames  Risk attitudes –Risk neutral –Risk adverse –Risk seeking  Often people tend to have risk attitudes that are context dependent

Troublesome Cognitive Heuristics Frames  Anchoring –Anchors are often arbitrary –People tend to make insufficient adjustments from the anchor

Troublesome Cognitive Heuristics Frames  Overconfidence –Belief and confidence in one’s own judgment or factual knowledge –Often is unwarranted and it should be examined.

Troublesome Cognitive Heuristics Frames  Availability of Information –Bias in how one pays attention to information –Reoccurring patterns of how one acquires information.

Troublesome Cognitive Heuristics Frames  Winners Curse