Editing Decision theory (section)

==Heuristics==
{{Main|Heuristics in judgment and decision-making}}
[[File:Roulette - detail.jpg|alt=A ball inside a spinning roulette wheel|thumb|The [[gambler's fallacy]]: even when the [[roulette]] ball repeatedly lands on red, it is no more likely to land on black the next time.  ]]
[[Heuristic]]s are procedures for making a decision without working out the consequences of every option. Heuristics decrease the amount of evaluative thinking required for decisions, focusing on some aspects of the decision while ignoring others.<ref name=":1">{{cite journal | vauthors = Bobadilla-Suarez S, Love BC | title = Fast or frugal, but not both: Decision heuristics under time pressure | journal = Journal of Experimental Psychology: Learning, Memory, and Cognition | volume = 44 | issue = 1 | pages = 24–33 | date = January 2018 | pmid = 28557503 | pmc = 5708146 | doi = 10.1037/xlm0000419 | url = http://discovery.ucl.ac.uk/10038268/1/2017-23585-001.pdf }}</ref> While quicker than step-by-step processing, heuristic thinking is also more likely to involve fallacies or inaccuracies.<ref name=":0">{{cite journal |last1=Johnson |first1=Eric J. |last2=Payne |first2=John W. |name-list-style=vanc |date=April 1985 |title=Effort and Accuracy in Choice |journal=Management Science |volume=31 |issue=4 |pages=395–414 |doi=10.1287/mnsc.31.4.395}}</ref>

One example of a common and erroneous thought process that arises through heuristic thinking is the ''[[gambler's fallacy]]'' — believing that an isolated random event is affected by previous isolated random events. For example, if flips of a fair coin give repeated tails, the coin still has the same probability (i.e., 0.5) of tails in future turns, though intuitively it might seems that heads becomes more likely.<ref name=":2">{{cite journal |last1=Roe |first1=Robert M. |last2=Busemeyer |first2=Jermone R. |last3=Townsend |first3=James T.  | name-list-style = vanc |title=Multialternative decision field theory: A dynamic connectionst model of decision making. |journal=Psychological Review |date=2001 |volume=108 |issue=2 |pages=370–392 |doi=10.1037/0033-295X.108.2.370 |pmid=11381834 }}</ref> In the long run, heads and tails should occur equally often; people commit the gambler's fallacy when they use this heuristic to predict that a result of heads is "due" after a run of tails.<ref name=":3">{{cite journal | vauthors = Xu J, Harvey N | title = Carry on winning: the gamblers' fallacy creates hot hand effects in online gambling | journal = Cognition | volume = 131 | issue = 2 | pages = 173–80 | date = May 2014 | pmid = 24549140 | doi = 10.1016/j.cognition.2014.01.002 | doi-access = free }}</ref> Another example is that decision-makers may be biased towards preferring moderate alternatives to extreme ones. The ''compromise effect'' operates under a mindset that the most moderate option carries the most benefit. In an incomplete information scenario, as in most daily decisions, the moderate option will look more appealing than either extreme, independent of the context, based only on the fact that it has characteristics that can be found at either extreme.<ref name=":4">{{cite journal |first1=Shih-Chieh |last1=Chuang |first2=Danny Tengti |last2=Kao |first3=Yin-Hui |last3=Cheng |first4=Chu-An |last4=Chou  | name-list-style = vanc |title=The effect of incomplete information on the compromise effect |journal=Judgment and Decision Making |volume=7 |issue=2 |date=March 2012 |pages=196–206 |doi=10.1017/S193029750000303X |url=http://journal.sjdm.org/11/11214/jdm11214.html |citeseerx=10.1.1.419.4767 |s2cid=9432630 }}</ref>