Representativeness heuristics: A literature review of its impacts on the quality of decision-making

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F18%3A00103580" target="_blank" >RIV/00216224:14560/18:00103580 - isvavai.cz</a>

Výsledek na webu

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DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Representativeness heuristics: A literature review of its impacts on the quality of decision-making

Popis výsledku v původním jazyce

The representativeness heuristic is one of the cognitive shortcuts that simplify human decision-making. The simplicity provided by the heuristic brings advantages but also risks arising from a lack of information, leading to cognitive errors and biases. The aim of this study is to identify and evaluate the impact of biases connected to the representativeness heuristic on the quality of economic decision-making. For that purpose, a systematic literature review was conducted, and seventeen empirical studies were analyzed. The review found that the effect of the biases is indeed significant in the real world, namely in the area of business. Most of the studies analyzed the representativeness heuristics in investment and did not prove any strictly negative impact of heuristic decision-making. In fact, under certain circumstances, representativeness heuristics can be recommended. In addition to investment, we covered studies focusing on management, auditing, insurance and consulting. Although these studies show the possible impact of the heuristic on the quality of decision making, it is impossible to form general conclusions due to the lack of research in these fields. Alongside investment, further research into the use of the representativeness heuristics in various settings is recommended as well as research into the possible ways to reduce or even eliminate the negative side effects and biases of the heuristics.

Název v anglickém jazyce

Representativeness heuristics: A literature review of its impacts on the quality of decision-making

Popis výsledku anglicky

The representativeness heuristic is one of the cognitive shortcuts that simplify human decision-making. The simplicity provided by the heuristic brings advantages but also risks arising from a lack of information, leading to cognitive errors and biases. The aim of this study is to identify and evaluate the impact of biases connected to the representativeness heuristic on the quality of economic decision-making. For that purpose, a systematic literature review was conducted, and seventeen empirical studies were analyzed. The review found that the effect of the biases is indeed significant in the real world, namely in the area of business. Most of the studies analyzed the representativeness heuristics in investment and did not prove any strictly negative impact of heuristic decision-making. In fact, under certain circumstances, representativeness heuristics can be recommended. In addition to investment, we covered studies focusing on management, auditing, insurance and consulting. Although these studies show the possible impact of the heuristic on the quality of decision making, it is impossible to form general conclusions due to the lack of research in these fields. Alongside investment, further research into the use of the representativeness heuristics in various settings is recommended as well as research into the possible ways to reduce or even eliminate the negative side effects and biases of the heuristics.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

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OECD FORD obor

50204 - Business and management

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Scientific Papers of the University of Pardubice Series D

ISSN

1211-555X

e-ISSN

1804-8048

Svazek periodika

26

Číslo periodika v rámci svazku

2

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

10

Strana od-do

29-38

Kód UT WoS článku

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EID výsledku v databázi Scopus

2-s2.0-85057788930