Heuristics and Bias

As an employee of It’s Electric, I have been delegated the assignment of picking a line of automobiles to use as company cars. On the grounds of economy and longevity, I am looking to purchase Volvo’s after some research on Consumer Reports. Through an exclusive fleet program, I found we could get the 2008 Volvo S40 1. 6 petrol engine for a great promotional deal through Volvo directly (‘Volvo’, 2007).

Before meeting with the people at Volvo, I spoke to my supervisor regarding this assignment and my choice. His initial reaction was one of judgment heuristic and availability heuristic. He felt strongly with his convictions about a Volvo due to the experience his brother-in-law had with one and went in to great length on why. Judgment heuristic was shown here for my supervisor made his assessment and judgment of probability simpler and availability heuristic was shown here for he also used what his brother-in-law experienced which is the process of perception and memory in the imagination.

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This information was available and fresh in his mind the moment Volvo was mentioned. He did not use information from consumer reports, but instead used availability heuristic to refer to his brother-in-law’s case and based his judgment on that. Events that are easily available within ones mind are more likely judged and to occur according to this heuristic. The biases, which are caused within availability heuristic, are the bias due to the easy retrievement of the instances where the supervisor was able to retrieve just one case against the negative of the Volvo.

Also, notice the bias due to effectiveness of the search for the recall process. Many events are hard to recall and some are memorable such as mistakes and errors, there is a bias in the search set itself. Another bias was imaginability, which played a role in the evaluation of probability in real life situations (Straker, 2007). An example I would say to him to help in influencing his decision to a positive about Volvo’s would be to share a story with him regarding my recent bad experience at a four star restaurant called Blue Fish, when I ate bad shrimp.

This does not mean this restaurant is bad, it just means I had one bad experience, I will either try steak or try the shrimp again for their service, drinks and appetizers were great. This does not mean I will go to my friends and family and say that this restaurant is bad do not eat there, for in all honestly it is not a bad restaurant and it just so happens I had one bad shrimp that resulted in an upset stomach. I would end this example with a question of “who has this not happened to at any restaurant where one has had bad food one time or another? The type of heuristic that will be employed here to influence my supervisor will be adjustment and anchoring. When adjusting ones beliefs in light of new information there needs to be solid evidence against it. Insufficient adjustment due to anchoring can lead to mistakes. I believe the research I have done is solid information to persway and influence my supervisor to help change his mind regarding Volvo’s (Plous, Chp. 13, 1993).

When I meet with my supervisor once again, I will influence his decision about Volvo’s with these facts and statistics such as: • premium small sedan with more storage space, • redesigned due to feedback from past years, • new safety features with more horsepower, a blind spot information system was added as well as a new automatic hazard warning • additional optional fun gadgets such as SIRIUS Satellite Radio and high performance audio system (‘New Cars’, 2007), • holds its own against other sport automobiles, for most buyers, the standard suspension setup provides plenty of thrills while providing more cushioning over potholes when driving along, • while yes it may not have the prestige or athleticism of its German foes, this Volvo costs less, has style with a premium feel, • with upgrades added the price may go up, but for a company car one should be reasonable, the base engine will be perfectly adequate and basic package, • this Volvo has slightly better fuel economy than the 2. i (Edmunds, 2007), Keeping in mind while all vehicles have their quirks and hiccups one should personally test-drive a vehicle before forming an opinion on what he or she thinks. With all the pros and cons, many people will form their own decisions in the end. The few that I have researched have said that the Volvo S’40 is refined, classy, great and runs just fine. Even without a slightly more powerful engine, it is as much of a “real” Volvo as any car is a “real” car.

By utilizing the heuristic strategy of anchoring and adjustment, I feel that I can show my supervisor that what happened to his brother-in-law has happened to many with any vehicle. I would have him ponder on that for a bit, while at the same time showing him what others have to say about the Volvo. I would inform him of the research I did through newcars. com, edmunds. com, and Volvocars. com. By informing him of this, I am using multiple anchor points to help make the final decision that the Volvo is the way to go. When one makes or judges something or someone based on vividness or recent events, they employ availability heuristic.

To help one change their mind or point of view we want to anchor the way adjustment is used and when a decision needs to be made it is made by adjustments to this anchor or starting point. The use of anchoring and adjustment may work in many cases such as this, but at times will not always weigh enough to other factors (Plous, Chp. 13, 1993). References AIU Online. (Ed. ). (ca. 2006). Unit 3: Heuristics and Bias [multimedia presentation]. Hoffman Estates, IL: AIU Online. Retrieved October 22, 2007, from AIU Online, Virtual Campus, BUS300-0704A-03: Decision Making. Website https://mycampus. aiu-online. com/Schools/5/CoursePlayer/CoursePlayer. spx? classid=106204&tid=71&un=1&HeaderText=Course Materials: BUS300-0704A-03 : Decision Making. Armstrong, B. (2007). Business Decisions: How to make them quickly, correctly, and stress free. Retrieved October 16, 2007, from Patent Consultants International http://www. patantconsult. com/articlesvault/Article/Business-Decisions–How-To-Make-Them-Quickly–Correctly–And-Stress-Free—/12181. Edmunds, Inc. (2007). Volvo S40 Review. Retrieved October 25, 2007, from http://www. edmunds. com/volvo/s40/review. html. ‘New Cars’. (2007). 2008 Volvo S40. Retrieved October 25, 2007, from MSN Autos http://autos. sn. com/research/vip/overview. aspx? year=2008&make=Volvo&model=S40 Plous, S. (1993). The psychology of judgment and decision making. McGraw-Hill, Inc. Straker, D. (2007). Anchoring and Adjustment Heuristic. Retrieved October 24, 2007, from Changing Minds. org http://changingminds. org/explanations/theories/anchoring_adjustment. htm. Straker, D. (2007). Availability heuristic. Retrieved October 24, 2007, from ChangingMinds. org http://changingminds. org/explanations/theories/availability_heuristic. htm. ‘Volvo’. (2007). Volvo models. Retrieved October 22, 2007, from http://www. volvocars. us/models/s40/.