Kruglanski and Gigerenzer (2011) however argue that in reality, every heuristic studied can be applied both consciously and unconsciously therefore, heuristics cannot be construed to stand in opposition to consciousness. Furthermore, heuristics cannot be pointed out as the general cause of errors since heuristics can lead to more precise inferences when compared to logical or statistical rules.
Wübben and Wangenheim (2008) conducted a study intended to establish the superiority of stochastic customer base analysis models - Pareto/NBD model and the BG/NBD model - over the simple heuristics that companies typically apply. They investigated how many accurate predictions the models made compared to the simple heuristics for an airline, an online CD retailer and an apparel retailer. The outcome showed that the heuristic performed at least as well as the stochastic models.
Gigerenzer (2014) therefore argue that heuristics and errors are not associated. The two- system view suggested by Kahneman (2011) overlooks the difference between uncertainty and risk suggesting that whereas statistical methods are vital when faced with known risks, heuristics on the other hand come in handy when faced with uncertainty. Todd and Gigerenzer (2012) therefore propose that instead of spending time knocking heuristics, there is the need to research their ecological rationality; i.e., to investigate in which circumstances heuristics work and in which circumstances they don’t.
The Greek term “heuristic” originally meant “serving to find out or discover” and in fields that deal with uncertainty such as artificial intelligence and animal behaviour, heuristics have continuously had a positive connotation (Gigerenzer, 2014:241). The Stanford mathematician Polya (1954) make a distinction between analytical thinking and heuristic, stating that
Page | 109 heuristic thinking is essential in finding a mathematical proof, while analytic thinking is required for checking the processes of a proof.
Emotions are complements to reason more often than they impede it, the interactions between reason and emotions are mostly beneficial. Emotions ward us away from being lost in thought when instant action is crucial, and emotions also reinforce lessons we must learn (Statman, 2014)
Figure 5.9: Fear Prevents Us from Thinking too Long Before Acting in Dangerous Situations
Source: Gigerenzer (2014: 66)
Stetson, Fiesta and Eagleman (2007) designed a test of present orientation (the tendency to overly concentrate on the present without taking the future into consideration) by asking participants to read some digital numbers that flashed quickly on a small display. They found that when the participants were relaxed, they could not read the numbers, since they flashed too quickly. However, in a freefall during bungee jump, they could read the numbers. The freefall elicits strong emotion and concentrates all mental resources solely on the present therefore providing an extra mental power that allows people the ability to read numbers that previously were undecipherable. Fear and excitement therefore heighten present awareness, while sharpening instincts and help us survive. Figures 5.10 and 5.11 respectively show how
Page | 110 frequently thirty-two executives from a technology-services provider and fifty top executives from an international car manufacturer make gut decisions based on self-reports.
Figure 5.10: Gut Decisions in an International Technology-Services Provider
Source: Gigerenzer (2014: 99)
According to Gigerenzer (2014), majority of the technology-services provider executives admitted that 50 percent of the time, they rely on gut decisions although few of them would admit publicly to doing so. Furthermore, the relatively higher occurrence of gut decisions among the executives of the car manufacturing company may be due to the fact that these executives were chosen from the top two levels only, instead of choosing from all levels.
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Figure 5.11: Gut Decisions in an International Car Manufacturer
Source: Gigerenzer (2014: 100)
Gigerenzer (2014) points out four misconceptions about intuition namely:
• The Opposite of Rationality is Intuition:
This is not so, as intuition can be described as unconscious intelligence that is based on personal experience and can be a smart rule of thumb therefore one requires both intuition and reasoning to be rational.
• Intuition is Female:
This has been a long-held view since the Enlightenment. Men are less likely to admit intuition or listen to their gut.
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• Deliberate Thinking is Superior to Intuition:
Intuition is not inferior to deliberate thinking and vice-versa. Good rules of thumb and intuitions are crucial in an uncertain world whereas logic or statistics is critical for dealing with known risks.
• Intuition is Grounded in a Complex Weighing of all Evidence Unconsciously:
This argument has been suggested to explain the reason why decisions based on intuition are often excellent because if an intelligent process is good then it must be based on the bookkeeping process of weighing everything. However, the bookkeeping method is only good in a world of known risk and not in a world of uncertainty. Evidence exist to prove that intuitions are based on smart, simple rules that only take into consideration some of the available information.
Gigerenzer (2014) postulates that Kahneman and followers view laws of logic and probability theory as general norm of rationality and “content-blind” and that heuristics can only be faster but never be more accurate. Although this is true in a world of know risks, in a world of uncertainties, simple heuristics can often do better. The real research question therefore should be aimed towards understanding why and when. The answers known today according to Gigerenzer (2014) are based on the general study of ecological rationality10 (Todd, Gigerenzer, and the ABC Research Group 2012) and bias-variance dilemma11 (Gigerenzer and Brighton, 2009).