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| title | chunk | source | category | tags | date_saved | instance |
|---|---|---|---|---|---|---|
| Availability heuristic | 4/6 | https://en.wikipedia.org/wiki/Availability_heuristic | reference | science, encyclopedia | 2026-05-05T09:57:20.549400+00:00 | kb-cron |
Outcome Availability – availability of positive and negative investment outcomes, and Risk Availability – availability of financial risk. On days of substantial stock market moves, abnormal stock price reactions to upgrades are weaker, than those to downgrades. These availability effects are still significant even after controlling for event-specific and company-specific factors. Similarly, research has pointed out that under the availability heuristic, humans are not reliable because they assess probabilities by giving more weight to current or easily recalled information instead of processing all relevant information. Since information regarding the current state of the economy is readily available, researchers attempted to expose the properties of business cycles to predict the availability bias in analysts' growth forecasts. They showed the availability heuristic to play a role in analysis of forecasts and influence investments because of this. In effect, investors are using the availability heuristic to make decisions and subsequently, may be obstructing their own investment success. An investor's lingering perceptions of a dire market environment may be causing them to view investment opportunities through an overly negative lens, making it less appealing to consider taking on investment risk, no matter how small the returns on perceived "safe" investments. To illustrate, Franklin Templeton's annual Global Investor Sentiment Survey 1 asked individuals how they believed the S&P 500 Index performed in 2009, 2010, and 2011. 66 percent of respondents stated that they believed the market was either flat or down in 2009, 48 percent said the same about 2010 and 53 percent also said the same about 2011. In reality, the S&P 500 saw 26.5 percent annual returns in 2009, 15.1 percent annual returns in 2010, and 2.1 percent annual returns in 2011, meaning lingering perceptions based on dramatic, painful events are impacting decision-making even when those events are over. Additionally, a study by Hayibor and Wasieleski found that the availability of others who believe that a particular act is morally acceptable is positively related to others' perceptions of the morality of that act. This suggests that availability heuristic also has an effect on ethical decision making and ethical behavior in organizations.
=== Education === A study done by Craig R. Fox provides an example of how availability heuristics can work in the classroom. In this study, Fox tests whether the difficulty of recall influences judgment, specifically with course evaluations among college students. In his study he had two groups complete a course evaluation form. He asked the first group to write two recommended improvements for the course (a relatively easy task) and then write two positives about the class. The second group was asked to write ten suggestions where the professor could improve (a relatively difficult task) and then write two positive comments about the course. At the end of the evaluation, both groups were asked to rate the course on a scale from one to seven. The results showed that students asked to write ten suggestions (difficult task) rated the course less harshly because it was more difficult for them to recall the information. Most of the students in the group that was asked to fill in 10 suggestions didn't fill in more than two being unable to recall more instances where they were unsatisfied with the class. Students asked to do the easier evaluation with only two complaints had less difficulty in terms of availability of information, so they rated the course more harshly. Another study by Marie Geurten sought to test the availability heuristic in young children. Children of varying ages (from 4 to 8 years old) were tasked with generating a list of names, with some being asked for a shorter list and some for a longer list. The study then assessed the children's own impressions of their ability to recall names. Those children who were tasked with generating a shorter list had a higher perception of their ability to recall names than those who were tasked with generating a longer list. According to the study, this suggests that the children based their assessment of their recall abilities on their subjective experience of ease of recall.