Representativeness is one of the major general purpose heuristics, along with availability and affect. It is used when we judge the probability that an object or event A belongs to class B by looking at the degree to which A resembles B. When we do this, we neglect information about the general probability of B occurring (its base rate) (Kahneman & Tversky, 1972). Consider the following problem:
Bob is an opera fan who enjoys touring art museums when on holiday. Growing up, he enjoyed playing chess with family members and friends. Which situation is more likely?
A. Bob plays trumpet for a major symphony orchestra
B. Bob is a farmer
A large proportion of people will choose A in the above problem, because Bob’s description matches the stereotype we may hold about a classical musicians rather than farmers. In reality, the likelihood of B being true is far greater, because farmers make up a much larger proportion of the population.
Representativeness-based evaluations are a common cognitive shortcut across contexts. For example, a consumer may infer a relatively high product quality from a store (generic) brand if its packaging is designed to resemble a national brand (Kardes et al., 2004). Representativeness is also at work if people think that a very cold winter is indicative of the absence of global warming (Schubert & Stadelmann, 2015) or when gamblers prefer lottery tickets with random-looking number sequences (e.g. 7, 16, 23, …) over those with patterned sequences (e.g. 10, 20, 30, ….) (Krawczyk & Rachubik, 2019). In finance, investors may prefer to buy a stock that had abnormally high recent returns (the extrapolation bias) or misattribute a company’s positive characteristics (e.g., high quality goods) as an indicator of a good investment (Chen et al., 2007).
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References
Chen, G., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2007). Trading performance, disposition effect, overconfidence, representativeness bias, and experience of emerging market investors. Journal of Behavioral Decision Making, 20, 425-451.
Kahneman, D., & Tversky, A. (1972). Subjective probability: A judgment of representativeness. Cognitive Psychology, 3, 430-454.
Kardes, F. R., Posavac, S. S., & Cronley, M. L. (2004). Consumer inference: a review of processes, bases, and judgment contexts. Journal of Consumer Psychology, 14(3), 230-256.
Krawczyk, M. W., & Rachubik, J. (2019). The representativeness heuristic and the choice of lottery tickets: A field experiment. Judgment and Decision Making, 14(1), 51-57.
Schubert, R., & Stadelmann, M. (2015). Energy-using durables: Why consumers refrain from economically optimal choices. Frontiers in Energy Research, 3, 7.