Management under Uncertainty

Abstract

This articlce describes three heuristics that are employed in making judgements uder uncertainty. Repsresentativness, which is usually employed when people are asked to judge the probability that an object or event belongs to a class or process. Heuristics are highly economical and usually effective, but they lead to systematic and predictable errors. . A better undderstanding of these heurisitcs and of the biases to which they lead could improve judgments and decisions in situations of uncertainty.