Representativeness Heuristic

The representativeness heuristic is another rule of thumb often used by us to arrive at judgments. In a way the representativeness heuristic operates on stereotypes. That is, we often ‘make judgments in uncertain situations by looking for familiar patterns and assuming that future patterns will resemble past ones, often without sufficient consideration of the reasons for the pattern or the probability of the pattern repeating itself. This anomaly of human judgment, called the representativeness heuristic’ [Shiller (2000)].