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```					The Availability Heuristic
   In a previous class session, you
completed a questionnaire that included
two questions.
   Today, I will present the results and
discuss some of the reasons that you
may have answered the questions the
way that you did.

avail3v3   Lehman Benson III, University of Arizona, 2006   1
Question One
   Which causes more deaths in the
United States?

   (A)              shark attacks
   (B)              getting hit by falling airplane
parts

avail3v3   Lehman Benson III, University of Arizona, 2006   2
   The percentage of students in this class
who selected:
   Shark attack: (write the percentage of the
students who selected sharks)%
   Getting hit by falling airplane parts: (write
in the percentage of students who selected
falling airplane parts)%

avail3v3   Lehman Benson III, University of Arizona, 2006   3
Typical Results
   Typically, more people (when asked this
question) select option (a), shark
attack, over option (b), getting hit by
falling airplane parts.
   Actual data, however, suggest that one
is 30 times more likely to die from being
hit by falling airplane parts.

avail3v3   Lehman Benson III, University of Arizona, 2006   4
   What are some plausible reasons that
most people think that shark attacks
cause more deaths in the United States
than getting hit by falling airplane
parts?

avail3v3   Lehman Benson III, University of Arizona, 2006   5
   “I can recall more shark deaths.”
terrible shark attack.”
   “I cannot recall any instances of a
person getting hit by falling airplane
parts.”
   “I can easily imagine going swimming
and getting attacked by a shark.”

avail3v3   Lehman Benson III, University of Arizona, 2006   6
Heuristics
   A rule of thumb is an easily learned and
easily applied procedure for estimating,
recalling some value, or making some
determination.
   In decision making, it is generally
accepted that heuristics are simple,
efficient rules of thumb that help people
make decisions or judgments, and help
them solve problems.
avail3v3   Lehman Benson III, University of Arizona, 2006   7
Heuristics, Cont‟d
   Heuristics are typically used when
decision makers face complex problems
or incomplete information, or are short
on time.
   In certain situations, however, rules of
thumb or heuristics can lead to
systematic cognitive biases and less-
than-optimal decisions.
avail3v3   Lehman Benson III, University of Arizona, 2006   8
Availability Heuristic
   This module discusses one mechanism
that can support but sometimes distort
judgments, the availability heuristic.
   According to Tversky and Kahneman
(1973, p. 208):
A person is said to employ the availability
heuristic whenever he estimates frequency
or probability by the ease with which
instances or associations could be brought
to mind.

avail3v3   Lehman Benson III, University of Arizona, 2006   9
Availability Heuristic, Cont‟d
   Thus, when people make judgments
available, vividly described, recent, or
perceived as being especially likely to
occur.

avail3v3   Lehman Benson III, University of Arizona, 2006   10
Availability Heuristic, Cont‟d
   Question One was a demonstration of
the availability heuristic.
   In forming some judgments, we tend to
rely on information that is readily
available in memory (e.g., recent,
salient, vivid), but fail to discount the
quality of that information.

avail3v3   Lehman Benson III, University of Arizona, 2006   11
Question Two
   Should we expect decision makers to
use the availability heuristic when
decisions?
   Let‟s see. Here are the results of the

avail3v3   Lehman Benson III, University of Arizona, 2006   12
Results: Availability In Memory
Company                Median Estimate                  Actual
AmerisourceBergen             15                         54.60
Oracle*           20                          11.79
Ingram Micro             10                         28.80
Nike*           24                          13.75
Starbucks *           20                          6.39
Southwest Airlines *           15                           7.54
Supervalu            8                         19.53
TechData            10                         20.54
AMR            15                          20.71
Hilton Hotels *           17                          4.43
McKesson            17                         80.51
eBay*            19                          4.55

Question Two: Estimate the sales revenues (note: sales revenues, not profits)
of the following Fortune 500 firms for 2005-2006.
avail3v3    Lehman Benson III, University of Arizona, 2006   13
Results: Availability In Memory, Again

Avg. Estimate   Avg. Actual
High Name Recognition
eBay, Hilton Hotels, Nike,
Oracle, Southwest Airlines,      19.16          8.07
Starbucks

Low Name Recognition
AmerisourceBergen, AMR
Ingram Micro, McKesson,          12.50          37.44
SUPERVALU, Tech Data
The Availability Heuristic in Action
   The two questions that we discussed
today demonstrated the availability
heuristic in quite different contexts.
   We also discussed specific types of
factors that might have influenced
students gave to the two questions
(things like ease of recall, vividness,
ease of imagining a scenario).
avail3v3   Lehman Benson III, University of Arizona, 2006   15
The Heuristic in Action, Cont‟d
   Another business example: A venture capitalist may
evaluate the probability that a given business venture
will succeed by the assessing the ease of imagining
various clients who will want to purchase a product
produced by the venture.
   Frank Yates (Yates, 1990) describes the process in
the following manner: Single Event A Scenario
Construction (e.g., client wishing to make a
purchase) Metacognition (e.g., assessed ease of
scenario construction)  Judged Likelihood of
Future Events Similar to Event A (e.g., real
clients actually wishing to make purchases)

avail3v3   Lehman Benson III, University of Arizona, 2006   16
Summary
   People often use rules of thumb or
heuristics to make judgments.
   Some judgmental heuristics, including the
availability heuristic, rest on meta-
thinking (Yates, 1990).
   Several factors can distort a person‟s
(Russo, 2002).
avail3v3   Lehman Benson III, University of Arizona, 2006   17
Managing the Availability
Heuristic
   Challenge: “Can decision makers
protect themselves from the risks
associated with judgment via the
availability heuristic?”
   One answer: “Yes. Decision makers
can train themselves to ask „The Three
Q‟s‟ when making frequency estimates
or probability judgments.”
avail3v3   Lehman Benson III, University of Arizona, 2006   18
The Three Q‟s
   1) Question the importance of the problem:
“How accurate do I need to be?” “Does it
matter that I am using a rule of thumb?”
   2) Question the quality of the information
being used to inform frequency estimates or
probability judgments: “How good are our
data?” “How complete are these scenarios?”
   3) Question how much meta-knowledge one
has: “How do I know whether I really
know?”
avail3v3 Lehman Benson III, University of Arizona, 2006 19
When Considering the Three Q‟s
   Tradeoffs: Would the ease of using the
availability heuristic offset its risk of yielding
inaccurate judgments?
   Stakes: Is the cost of making a judgment
error so high that gathering more data or
creating more scenarios is warranted, to
avoid such an error?
   Influences: What kinds of things might be
influencing my judgments (e.g., vividness,
ease of recall, ease of imagining scenarios),
perhaps at the expense of “the truth?”

avail3v3   Lehman Benson III, University of Arizona, 2006   20
The Bottom Line
   Good decision making requires both
good meta-knowledge and good factual
knowledge.

avail3v3   Lehman Benson III, University of Arizona, 2006   21
   Carroll, J. S. (1978). The effect of imagining an event on expectations for the
event: An interpretation in terms of the availability heuristic. Journal of
Experimental Social Psychology, 14, 88-96.
   Combs, B., & Slovic, P. (1979). Newspaper coverage of causes of death.
Journalism Quarterly, 56, 837-843.
   Ruscio, J. (2002). Clear thinking with psychology: Separating sense from
   Schwarz, N. (2004). Metacognitive experiences in consumer judgment and
decision making. Journal of Consumer Psychology, 14, 332-348.
   Russo, J.E., & Schoemaker P.J. (2002). Winning Decisions. New York, NY:
Doubleday.
   Tversky, A., & Kahneman, D. (1973). Availability: A heuristic for judging
frequency and probability. Cognitive Psychology, 5, 207-232.
   Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics
and biases. Science, 185, 1124-1130.
   Yates, J. F. (1990). Judgment and decision making. Englewood Cliffs, NJ:
Prentice-Hall.

avail3v3   Lehman Benson III, University of Arizona, 2006          22

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