Relying on the heuristic of trust – a case study

Abstract

This study examines the reliance on trust as a heuristic by individuals when making personal financial decisions, using a qualitative case study. We show that in the face of complexity and choice, individual investors predominantly resorted to the heuristic of trust to make financial decisions. This demonstrates the need for industry and public policy-makers to be aware that individuals can and will resort to simplified heuristics as a basis for financial decision-making, particularly within an environment where substantial complexity and choice exist.