I was recently asked on Quora, “Should one use heuristics at all as they are prone to cognitive biases?” What follows are my thoughts.
Heuristics usually allow people to make quicker decisions. For example, when catching a fly baseball, sometimes people use a gaze heuristic to keep the ball at roughly the same inbound angle by adjusting their position and moving forward or backward. This gaze heuristic allows us to quickly and dynamically make judgments to catch the ball as opposed to having to pull out the slide rulers, calculators, and physics books to figure out where the ball is going to land.
While heuristics can help with speed, sometimes we have the benefit of time to slow down to think about the consequences of potential biases and where the heuristics might lead us astray. For example, people often talk about a 4% drawdown rule/heuristic for using your wealth at retirement (e.g., use up 4% of your wealth each year). But one has to remember that using up your wealth is essentially an irreversible process. What type of risk analysis have you done? Have you assessed your longevity and potential variances both positive and negative? What happens if you live 40 more years? Have you accounted for negative health events? Have you thought about maximizing your happiness in retirement as opposed to economic numbers?
So heuristics can be used with some success. But heurisrics should be audited for their benefits and shortcomings, especially if the consequences of an error are significant enough.