Decision makers are often called on to make snap judgments using fast-and- frugal decision rules called cognitive heuristics. Although early research into cognitive heuristics emphasized their limitations, more recent research has focused on their high level of accuracy. In this paper we...

Extended warranties are popular but expensive. This paper examines how consumers value these warranties, and asks whether economic considerations alone can account for their popularity. Results from two field surveys show that consumers greatly overestimate both the likelihood and the cost of...