Join David M Frees, Somnath Sikdar, and Alex Frees to answer the question: What Are Heuristics and Cognitive Bias? And how do you make your Marketing & Life Better & Richer.

Confessions of the Pricing Man by Hermann Simon:

http://amzn.to/2tXkhNz

Awesome cognitive bias codex image:

https://en.wikipedia.org/wiki/List_of_cognitive_biases

ethics of it:

http://ritholtz.com/2016/09/cognitive-bias-codex/

http://www.tristanharris.com/

Heuristics, which are commonly defined as cognitive shortcuts or rules of thumb that simplify decisions, represent a process of substituting a difficult question with an easier one (Kahneman, 2003). Heuristics can also lead to cognitive biases. There are divisions regarding heuristics' relation to bias and rationality. In the fast and frugal view, the application of heuristics (e.g. the recognition heuristic) is an "ecologically rational" strategy that makes best use of the limited information available to individuals (Goldstein and Gigerenzer, 2002). Furthermore, while heuristics such as affect, availability, and representativeness have a general purpose character, others developed in social and consumer psychology are more domain-specific, examples of which include brand name, price, and scarcity heuristics (Shah & Oppenheimer, 2008).

Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological Review, 109(1), 75-90.

Kahneman, D. (2003). Maps of bounded rationality: Psychology for behavioral economics. The American Economic Review, 93, 1449-1475.

Shah, A. K., & Oppenheimer, D. M. (2008). Heuristics made easy: An effort-reduction framework. Psychological Bulletin, 134(2), 207-222.

Cognitive bias

A cognitive bias (e.g. Ariely, 2008) is a systematic (non-random) error in thinking, in the sense that a judgment deviates from what would be considered desirable from the perspective of accepted norms or correct in terms of formal logic. The application of heuristics is often associated with cognitive biases, some of which, such as those arising from availability or representativeness, are 'cold' in the sense that they do not reflect a person's motivation and are instead the result of errors in information processing. Other cognitive biases, especially those that have a self-serving function (e.g. optimism bias), are more motivated. Finally, some biases, such as confirmation bias, can be motivated or unmotivated (Nickerson, 1998).

Confirmation bias

Confirmation bias occurs when people seek out or evaluate information in a way that fits with their existing thinking and preconceptions. The domain of science, where theories should advance based on both falsifying and supporting evidence, has not been immune to bias, which is often associated with people trying to bolster existing attitudes and beliefs. For example, a consumer who likes a particular brand and researches a new purchase may be motivated to seek out customer reviews on the internet that favor that brand. Confirmation bias has also been related to unmotivated processes, including primacy effects and anchoring, evident in a reliance on information that is encountered early in a process (Nickerson, 1998).

Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises. Review of General Psychology, 2, 175-220.

List of confirmation Biases

Cognitive biases can be organized into four categories: biases that arise from too much information, not enough meaning, the need to act quickly, and the limits of memory[1].