Cognitive distortions as a component and treatment focus of pathological gambling: a review. Feldman, N. H., Griffiths, T. L., & Morgan, J. L. (2009). Certified Banking & Credit Analyst (CBCA)™, Capital Markets & Securities Analyst (CMSA)™, Financial Modeling & Valuation Analyst (FMVA)®. The representativeness heuristic was coined by Daniel Kahneman and Amos Tversky, two of the most influential figures in behavioral economics. While Plato first touched on categories in his Statesman dialogue, it became a philosophical mainstay of his student, Aristotle, who, in a text simply called Categories, aimed to sort every object of human apprehension into one of ten categories. Let’s look at an example of information processing errors, commonly referred to as heuristic simplification. Intuitively, we feel like Steve must be a librarian because we are bound to think in terms of categories and averages. She is 31, single, outspoken and very bright. The representativeness heuristic is related to the base rate fallacy. Stereotypes. You may want to consider keeping an investment diary. All Rights Reserved, Example 1 - Representativeness, stress, and stomach ulcers, Example 2 - Astrology and representativeness, https://www.researchgate.net/profile/Thomas_Gilovich/publication/288842297_Like_goes_with_like_The_role_of_representativeness_in_erroneous_and_pseudo-scientific_beliefs/links/5799542208ae33e89fb0c80c/Like-goes-with-like-The-role-of-representativeness-in-erroneous-and-pseudo-scientific-beliefs.pdf. People frequently make the mistake of believing that two similar things or events are more closely correlated than they actually are. But that is incorrect. Fill out the form below to get in touch with our team. For example, if you are thinking of flying and suddenly think of a numb… Because we rely on categories and prototypes to guide our perception of others, we can easily end up drawing on stereotypes to make judgments about other people. Grouping similar things together—that is, categorizing them—is an essential part of how we make sense of the world. However, being aware of it is a good start: research has shown that when people become aware that they are using a heuristic, they often correct their judgment.10 Pointing out other people’s reliance on representativeness, and asking them to do the same for you, provides useful feedback that might help to avoid bias. Statistically speaking, this is never true. He has a need for order and clarity, and for neat and tidy systems in which every detail finds its appropriate place. Representative Heuristic On to representativeness. Anchoring bias occurs when people rely too much on pre-existing information or the first information they find when making decisions. Decision framing 5. Behavioral interview questions and answers. 2 Intuitively, most of us feel like Steve must be a librarian because he’s more representative of our image of a librarian than he is our image of a farmer. Rosy retrospection refers to our tendency to recall the past more fondly than the present, all else being equal. Representativeness refers to judgements based on stereotypes. Many people when asked this question go for option 2, that Laura works in a bank but is also active in the feminist movement. People tend to judge the probability of an event by finding a‘comparable known’ event and assuming that the probabilities will besimilar. if(wpruag()){document.write("