Gerd Giger-Renser: Sometimes heuristics are dangerous and sometimes it's hard to know where to find the heuristic or the first thing to put in that fast infragal tree. The important question is to use them in the right situation, for instance, in situations of uncertainty. He says we also should not forget that analytic methods can lead to excellent results but also to total failures. Rich Goyette: We have to understand its limitations otherwise it becomes the equivalent of a religion.
Psychologist and author Gerd Gigerenzer of the Max Planck Institute for Human Development talks about his book Gut Feelings with EconTalk host Russ Roberts. Gigerenzer argues for the power of simple heuristics--rules of thumb--over more complex models when making real-world decisions. He argues that many results in behavioral economics that appear irrational can be understood as sensible ways of coping with complexity.