The psychologist Daniel Kahneman, in his excellent book Thinking, Fast and Slow, states that a heuristic is: “…a simple procedure that helps find adequate, though often imperfect, answers to difficult questions. The word comes from the same root as eureka.”

In short, a heuristic is a rule of thumb. Heuristics allow us to make a snap decision on something. However, they don’t provide a guaranteed outcome that is perfect or rational. Throughout our daily lives, we employ numerous heuristics without realising. Often this is reframed as ‘common sense’. For example, if we see someone driving an expensive car, we’re likely to assume they’re rich. While if we see someone in battered and dirty clothes, we’re likely to assume they’re poor.

The reason we fall back on these mental shortcuts is because they save mental effort, and most of the time, they are correct. Intuition and the experience we have developed over many years has allowed us to develop shorthands for situations that we encounter every day.

Heuristics and biases are closely related and some of Kahneman’s own research highlighted that relying too much on heuristics when faced with uncertainty can lead to the development of judgements that are incorrect. Therefore, it’s important when we do resort to using heuristics, that they are watertight more often than they are faulty. Thankfully, there are several heuristics that conform to this standard.

When you’re faced with an uncertain situation, or you want to know the best course of action, you can relate back to these heuristics to give you an idea of the decision you should make.

A good person is warm and respectful towards people of lower financial and social condition

This is one of the simplest ways you can figure out the character of someone after you’ve only just met them. How they treat service staff or people that are deemed to be further down the social scale is telling.

In fact, research has shown that people from a lower end of the income scale are more likely to be empathetic and help those in distress. It’s worth remembering this is one study, as such it should be taken with a pinch of salt. Not all those on a lower income are empathetic to others, while there are many people who earn a high wage, who are respectful of people working in lower-paid jobs.

This is where the above heuristic comes in. It’s a small character trait that can reveal a lot about a person, and provide us with an insight into their character. If the person demeans service staff or rants at them, there's a good chance they’re not the nicest person. Whereas, if they’re respectful towards the staff, engage them in conversation and treat them like everyone else, then this is a sign that they have a decent character.

It’s a simple thing, but observing how people deal with those working in service positions, or from a lower economic background than them, is a great tell of someone’s character.

If you spot a fraud and do not say fraud, you are a fraud

In our everyday lives, we often come across situations that are wrong or fraudulent. We have a choice to make in these scenarios. Do we call out what we’ve seen, or do we let it slide? In his book, Antifragile, the writer

Nassim Taleb coined the above heuristic to deal with such scenarios. He states that if we spot a fraud and do not say fraud, we are a fraud.

One of the biggest frauds in history is the Bernie Madoff Ponzi scheme. For years Madoff operated this scheme duping investors into believing he was returning ‘curiously steady’ returns of 13 to 20% a year. Despite these returns, the Security and Exchanges Commission which regulates the financial markets in the United States dropped their investigation into him in 1992. Seven years later, Harry Markopolos raised the alarm bell and declared that Madoff’s activities were fraudulent.

Markopolos could have remained quiet, he could have looked the other way when he found evidence of Madoff’s fraud, but he decided to call out Madoff and his operation. In the end, Markopolos was proven right, as Madoff’s fraud was uncovered in 2008 at the height of the financial crash. We’re unlikely to encounter such scenarios in our lives, but if we see something that is not right, it’s important we speak out.

By holding our peace, we are only lying to ourselves and failing to intervene when we should.

Injuries done to us by others tend to be acute; the self-inflicted ones tend to be chronic

This heuristic resonates with me because I’ve been the victim of two car crashes while cycling, both of which were near-fatal. On each occasion, I was lucky to walk away with a few cuts and bruises. My body hurt for the next week or so, but after that, I felt fine again. A week of pain is not bad considering how bad things could have been!

Instead of injuries by others, or as an innocent party in an accident it’s the damage we inflict on ourselves that tends to last the longest. This is true of the many vices that can befall us. Most of us like an alcoholic drink every now and again, but if this becomes a chronic addiction, the damage it can do is devastating. It’s estimated that 88,000 people die from alcohol-related causes every year in the United States. Chronic addiction such as smoking and drug use have similar effects and high mortality rates.

We’re more likely to be overawed by a big accident or a broken bone, but in most cases, these heal in time. What’s more dangerous is a habit that becomes normalised over time. If we’re not careful, these habits can spiral out of control and consume us.

The more effort invested in an object, the better it is deemed to be

This is another heuristic that we know to be true. One of the best examples of this is the world of watches. Many of us recognise Rolex as a luxury brand, while we consider digital watches to be tacky and less valuable. A lot of this is due to the effort that goes into making watches. Some luxury watches can take up to three years to complete and one company only makes ten a year. As a result of the craftsmanship and the effort that has gone into producing these watches, they often cost six figures. That is in stark contrast to digital watches, which are much cheaper.

It’s no surprise that we deem things to be of higher value when significant effort has gone into producing it. This is in part due to the scarcity effect. These objects are likely to be more scarce than others due to the length of time needed to create them. Thus we perceive them to be of higher value.

You may be wondering how this can help in your daily life? Well, sometimes, it can be better to invest in something that costs more because it’s likely to be of better quality. It’s tempting to plump for the cheap option, but if something has taken a long time to create, then it stands to reason that it will last longer than something that’s mass-produced.

The longer something that is non-perishable exists, the longer it will exist

This is another heuristic that was popularised by Nassim Nicholas Taleb. In his book, The Black Swan, he refers to it as the Lindy Effect. The term refers to a delicatessen in New York of the same name, where comedians gathered to discuss the staying power of their peers. The comedians were of the belief that if someone used up their material in a short space of time, their career would soon be over. While the reverse was true. If they made fewer, but higher-impact appearances, their career was likely to last longer.

The Lindy Effect doesn’t apply to things with a specific lifespan, such as humans, but to items that are non-perishable, such as books or buildings. Looking at books is a good way to apply the heuristic. If a book has remained in print for fifty years, it’s likely that it will continue to last for another fifty. Think of classic texts such as Meditations, Plato’s Republic or Letters From a Stoic. All of these books were written two thousand years ago and are still in print today.

As they have lasted so long, this tells us that they have an intrinsic value that should continue to apply long into the future. This is a good metric to decide which books you should read. If a book has remained in print for such a period of time, it tells us that it’s continued to find an audience and is more valuable than the hundreds of thousands of books printed every year.

The rule of thumb is simple, if something has lasted for a long time, it implies value and that it will continue to provide value for many years to come.

Concluding Thoughts

Our brains process a lot of information during our daily lives. The reason we use heuristics is to speed up certain processes to preserve energy for when we need to exert effort on more difficult tasks.

While some heuristics are obvious, there are others that are less obvious, but if internalised can help us come to decisions quicker. No heuristic is foolproof, but they are a useful way of making a quick decision when needed if we encounter uncertainty.

To sum up, here are the five heuristics:

1. A good person is warm and respectful towards people of lower financial and social condition
2. If you spot a fraud and do not say fraud, you are a fraud
3. Injuries done to us by others tend to be acute; the self-inflicted ones tend to be chronic
4. The more effort invested in an object, the better it is deemed to be
5. The longer something that is non-perishable exists, the longer it will exist

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