Florian Artinger | BIBaP Luncheon on Psychological AI

Psychological AI: How the Formal Representation of Heuristics Provides Insights into Effective Decision Strategies in an Uncertain World

In 1958, two pioneers of Artificial Intelligence (AI), Herbert Simon and Alan Newell, suggested that studying human decision-making—particularly the formal representation of heuristics people use—could significantly contribute to AI development. Psychological AI leverages psychological principles, such as heuristics, to design computer algorithms that are inherently transparent, promote human-machine interaction, and perform robustly in uncertain environments. This Master Class introduces heuristics as formal algorithms, demonstrating through real-world examples how these simple models can match or even outperform complex machine learning algorithms. It explores the notion of ecological rationality, explaining when one ought to rely on simple heuristics and when on complex algorithms from statistics and machine learning. Finally, the class examines how formalizing heuristics used by individuals and organizations can shed light on behavioral paradoxes observed at the aggregate market level.

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Florian Artinger is a professor of data science and business at the German University of Applied Sciences and an associated scientist at the Max Planck Institute for Human Development. He earned his PhD in economics from the Max Planck Institute. His award-winning work has been published in leading international journals and focuses on decision-making under uncertainty. He examines the decision strategies that experts such as managers use in an uncertain world and seeks to address to what extent these strategies may or may not be well adapted to the environment. He is also a co-founder of Simply Rational which bridges research and industry, helping organisations improve decision processes using insights from behavioural science and machine learning. As a Max Planck spin-off, Simply Rational was founded together with Prof. Gerd Gigerenzer, one of the world’s most renowned psychologists.