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QUESTION
Title:
economics- Decision heuristics and Independence of Irrelevant alternatives
Paper Details
no sources required. Need essay that includes one page on the Decision heuristics concept and one page on Independence of Irrelevant alternatives. Should have relevant examples of each concept. Also need plagiarism report
| Subject | Essay Writing | Pages | 3 | Style | APA |
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Answer
Decision Heuristics and Independence of Irrelevant alternatives
Decision Heuristics
Heuristics play a significant role when it comes to problem solving or making important decisions. Heuristics are mental shortcuts that allow individuals to make quick judgments or decisions without spending a lot of time analyzing or searching for information. In other words, they are efficient, particularly, for short-term or immediate goals, where finding an optimal solution is impractical. In this regard, heuristics methods can be employed to simplify and speed up the decision making process, thus arriving at the most suitable solution.
Heuristic approaches are often derived from previous experiences when dealing with similar issues or situations. In other words, they rely on readily available information to solve certain problems and tend to focus on one major aspect of the matter while ignoring the rest. They can be classified into three categories including availability, representative, and anchoring and adjustment heuristics. Availability heuristics tend to depend on immediate mental pictures that come to mind when evaluating the probability and frequency of a particular event. For instance, people who have read many case studies regarding successful businesses are more likely to expect the probability of running a successful business to be greater than that of managing an unsuccessful one. In contrast, representative heuristics involve making decisions based on comparisons between present situations and representative mental prototypes. For example, when evaluating whether an individual is a criminal or not, one might compare their character with that of an existing mental prototype. On the other hand, anchoring and adjustment heuristics are commonly used when predicting an unknown value.
Independence of Irrelevant Alternatives
The independence of irrelevant alternatives (IIA) is an axiom of various social sciences and decision theory. It can also be referred to as binary independence and is commonly used to provide an account for rational individual preferences or behavior from diverse contexts. For instance, in individual choice theory, if an alternative X is selected from a set K, and X is a component of subset M and N, then X should be chosen from M. In other words, the removal of a few alternatives that had not been chosen from the previous subsets should not affect the selection of X as the most suitable option. On the other hand, in social theory, if B is chosen over C from an alternative set {B, C} through a voting rule of a voter that is based on their preferences of B,C and an unavailable third choice X, then a change in the preference of X should not lead to the selection of C over B. That is to say, a change in the vote for an unavailable X should not affect the selection of either B or C.
Independence from irrelevant alternatives in voting systems is usually interpreted to mean that the victory of candidate X in an election is not influenced by the presence or addition of candidate Y in the ballot box. In other words, the election can be won by either candidate X or Y depending on the choices of the voters. Besides, some voters with meaningful preferences in an election with only two alternatives may abstain from voting or cast a vote that has little or no voting power. In this regard, the odds of voters choosing candidate X should not depend on whether or not another alternative Y is present or absent.