How can anyone be rational in a world where knowledge is limited, time is pressing, and deep thought is often an unattainable luxury? Traditional models of unbounded rationality and optimization in cognitive science, economics, and animal behavior have tended to view decision-makers as possessing supernatural powers of reason, limitless knowledge, and endless time. But understanding decisions in the real world requires a more psychologically plausible notion of bounded rationality. In Simple heuristics that make us smart (Gigerenzer et al. 1999), we (...) explore fast and frugal heuristics – simple rules in the mind's adaptive toolbox for making decisions with realistic mental resources. These heuristics can enable both living organisms and artificial systems to make smart choices quickly and with a minimum of information by exploiting the way that information is structured in particular environments. In this précis, we show how simple building blocks that control information search, stop search, and make decisions can be put together to form classes of heuristics, including: ignorance-based and one-reason decision making for choice, elimination models for categorization, and satisficing heuristics for sequential search. These simple heuristics perform comparably to more complex algorithms, particularly when generalizing to new data – that is, simplicity leads to robustness. We present evidence regarding when people use simple heuristics and describe the challenges to be addressed by this research program. Key Words: adaptive toolbox; bounded rationality; decision making; elimination models; environment structure; heuristics; ignorance-based reasoning; limited information search; robustness; satisficing; simplicity. (shrink)

Gigerenzer’s ‘external validity argument’ plays a pivotal role in his critique of the heuristics and biases research program (HB). The basic idea is that (a) the experimental contexts deployed by HB are not representative of the real environment and that (b) the differences between the setting and the real environment are causally relevant, because they result in different performances by the subjects. However, by considering Gigerenzer’s work on frequencies in probability judgments, this essay attempts to show that there are fatal (...) flaws in the argument. Specifically, each of the claims is controversial: whereas (b) is not adequately empirically justified, (a) is inconsistent with the ‘debiasing’ program of Gigerenzer’s ABC group. Therefore, whatever reason we might have for believing that the experimental findings of HB lack experimental validity, this should not be based on Gigerenzer’s version of the argument. (shrink)

The ‘bat and ball’ is one of the problems most frequently employed as a testbed for research on the dual-system hypothesis of reasoning. Frederick (J Econ Perspect 19:25–42, 2005) is the first to envisage the possibility that different numerical arrangements of the ‘bat and ball’ problem could lead to different dynamics of activation of the dual-system, and so to different performances of subjects in task accomplishment. This possibility has triggered a strand of research oriented to accomplish ‘sensitivity analyses’ of the (...) ‘bat and ball’ problem. The scope of this paper is to test experimentally the specific hypothesis that numerals are responsible for the selective activation of the two systems of reasoning in this task. In particular, we argue that their role goes beyond and cannot be reduced to that of numbers conceived as magnitudes. To test our hypothesis, we devise an experimental setting in which the role of numbers (as magnitudes) is rendered irrelevant. We find experimental results consistent with our hypothesis. We further provide a link between the literature on mathematical problem-solving and that on mathematical cognition research, in particular that branch labeled embodied mathematical cognition. (shrink)

Given free information and unlimited processing power, should decision algorithms use as much information as possible? A formal model of the decision-making environment is developed to address this question and provide conditions under which informationally frugal algorithms, without any information or processing costs whatsoever, are optimal. One cause of compression that allows optimal algorithms to rationally ignore information is inverse movement of payoffs and probabilities (e.g., high payoffs occur with low probably and low payoffs occur with high probability). If inversely (...) related payoffs and probabilities cancel out, then predictors that correlate with payoffs and consequently condition the probabilities associated with different payoffs will drop out of the expected-payoff objective function, severing the link between information and optimal action rules. Stochastic payoff processes in which rational ignoring occurs are referred to as compressed environments, because optimal action depends on a reduced-dimension subset of the environmental parameters. This paper considers benefits and limitations of economic models versus other methods for studying links between environmental structure and the real-world success of simple decision procedures. Different methods converge on the normative proposition of ecological rationality, as opposed to axiomatic rationality based on informational efficiency and internal consistency axioms, as a superior framework for comparing the effectiveness of decision strategies and prescribing decision algorithms in application. (shrink)

How do mushroom foragers make safe and efficient decisions under high degrees of uncertainty, or deal with the genuine risks of misidentification and poisoning? This article is an inquiry into ecological rationality, heuristics, perception, and decision-making in mushroom foraging. By surveying 894 Finnish mushroom foragers with a total of 22,304 years of foraging experience, this article illustrates how socially learned rules of thumb and heuristics are used in mushroom foraging. It illustrates how traditional foraging cultures have evolved precautionary principles to (...) deal with uncertainties and poisonous species, and how foragers leverage both simple heuristics and complex cognitive strategies in their search for, and identification of, mushrooms. Foragers also develop selective attention through experience. The results invite us to consider whether other human foraging cultures might use heuristics similarly, how and why such traditions have culturally evolved, and whether early hunter-gatherers might have used fast and frugal heuristics to deal with uncertainty. (shrink)