Availability heuristic
Also called: Availability bias · Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
The availability heuristic is judging how likely something is by how easily examples come to mind. Events that are recent, vivid or heavily reported feel more common than they really are. It is a mental shortcut (heuristic) studied by Kahneman and Tversky (1974). It matters because it distorts decisions on risk, insurance, investment and public policy.
Example
After a widely reported plane crash, many people become afraid of flying and choose to travel by road, even though road travel is riskier. The crash is easy to recall, so flying feels more dangerous than it is.
Don't confuse with
- Anchoring: leaning too much on the first number you see, such as a high printed MRP. Availability is about how easily examples come to mind.
Related concepts
- Behavioural economics
- Bounded rationality
- Satisficing
- Heuristics
- Anchoring
- Confirmation bias
- Overconfidence bias
- Prospect theory
- Loss aversion
- Endowment effect