Final answer:
Shane is using a heuristic, which is a mental shortcut to simplify decision-making by focusing on specific criteria and limiting options. This approach helps him prevent overwhelm and reduce the chances of buying a 'lemon' in a market with imperfect information.
Step-by-step explanation:
Shane is employing a decision-making strategy known as a heuristic. Heuristics are mental shortcuts that simplify decision-making by limiting the range of options considered. In the context of buying a car, Shane limits his search to used cars that are less than five years old and that get at least 22 miles per gallon, which helps him avoid the overwhelming task of evaluating every used car available.
When buying a car in a world of imperfect information, where sellers might not disclose all issues, relying on heuristics can be a rational way to navigate the process. By setting specific criteria that balance quality and efficiency, Shane aims to find a car that meets his needs without the necessity to become an expert in the automobile market or falling victim to common seller tactics.
It is important for Shane to be aware that while heuristics are useful, they are not foolproof and can lead to biases or errors. Therefore, being open to new information and critical evaluation during the car buying process is recommended to avoid purchasing a "lemon" or a defective car.