The 25 Cognitive Biases Biases Uncovering Uncov ering The Myth M yth of Rational Think Thinking By Charles Charles Holm
Copyri Copyrig ght 2015 by Charl Charles es Holm
All rights reserved in all media. No part of this book may be used or reproduced without written permissi permission on,, except except in the the case of brief quotat quotations ions embodied embodied in critical articles articl es and reviews.
Table of Contents Preface Pr eface Chapter 1: Projection Bias B ias Chapter 2: Hyperbolic Discounting Chapter 3: Fundamental Attribution Error or Correspondence Bias Chapter 4: Curse of Knowledge Chapter 5: Dunning-Kruger Effect Chapter 6: Framing Effect Chapter 7: Hindsight Hindsigh t Bias Chapter 8: Identifiable Victim Effect Chapter 9: Sunk Cost Fallacy or Irrational Escalation Chapter 10: Loss Aversion Av ersion Chapter 11: Outcome Bias Chapter 12: Overconfidence Effect Chapter 13: Risk Compensation or Peltzman Effect Chapter 14: Halo Effect Chapter 15: Illusion of Asymmetric Insight Chapter 16: Self-Serving Bias Chapter 17: Illusion of Truth Effect or The Truth Effect Chapter 18: Spotlight Effect Chapter 19: Survivorship Bias Chapter 20: Availability Bias Chapter 21: The Swimmer’s Swimmer’s Body Illusion Il lusion Chapter 22: Negativity Bias
Chapter 23: Anchoring Effect Chapter 24: Confirmation Bias Chapter 25: Bias Blind Spot Conclusion
Preface We humans applaud our ability to be rational, objective thinkers. In reality this is not the case at all. We all have the tendency to overestimate our rationality to the point of denying reality. The many ays in which we do this are collectively called cognitive biases. Our brain may be the most complicated thinking machine but it is not without limitations. In our attempt to understand the world around us through our lens we simplify things and fall prey to cognitive biases. Sometimes these biases are a re caused by heuristics or men mental tal shortcu shortcuts ts which which help help us reach qu quick ick judg judgm ments ents when we have little time. At other times our judgment is clouded by situational factors and inner motivations and emotions. However we are not completely helpless in this aspect. Knowing these biases exist can help us avoid them through conscious efforts. We need to be able to recognize these biases in our decision making. They are inevitable in most cases but they are not impossible to bypass.
Chapter Chap ter 1: Projection Projection Bias Bias “You are all invited to a fun get together at my house where we will watch popular Japanese anime, eat caramel popcorn, paint each other’s faces and play hide and seek in the yard” The host of this party has mistakenly assumed everyone else shares their definition of ‘fun’. This tendency to confidently assume that others share our thinking pattern, attitudes and beliefs is known as the projection bias. A related effect known as the false-consensus bias takes this tendency a step further further makin making g us us beli be lieve eve others others ‘agree’ with wi th our our view vi ewss as a s well w ell . We We hold on to these these assu ass umptions despite knowing it is impossible for everyone to use the same mental framework that we do. However, the projective bias is not limited to the views of other people but also includes incorrect predictions about about our our own views at any any point in th the futu future. re. Our Our decision decisi onss for th the futu future re are majorly based on the the assumption assumption that that our our current current preferences preferences will wil l stay the the same same regardless of time. time. A man who is very hungry will end up buying more food than what he would normally eat assuming his uture self will be just as hungry as he is in that moment. The main problem underlying projection bias is not being able to understand that you are different from others. Hence a way of avoiding this is to give some time, before making quick judgments, to think about how others perception can be different from yours. A simple way to find this out can be to ask their their opinions beforehand.
Chapter Chap ter 2: Hyperboli Hyperb olicc Discounting Would you prefer to t o get $5 right ri ght now or $10 in two t wo weeks? If your immediate answer is $5 you just engaged in yet another bias known as hyperbolic discounting. This refers to our tendency to choose a smaller reward given sooner over a delayed larger reward. We tend to place a higher value on temporal proximity (nearness of the event to the present) rather than the actual reward because we ant to avoid waiting wai ting.. You You migh mightt have also al so considere c onsidered d the altern alter nate to be a rational r ational choice. c hoice. But then then again, cognitive cognitive biases bias es go against against all al l comm common sense.
Why is it called ‘hyperbolic’? The tendency to fall prey to this bias decreases as time for both rewards gets further away from the present. So you may prefer to get $100 in 5 years than 50$ in 4 years. You may think if you have to wait that much anyway why not wait another year and get double the amount. The reason this thinking is considered irrational is because we are viewing the same problem different differently ly simply simply based based on the the temporal temporal proximity proximity.. People in th the market marketing ing bu business siness are ell aware awar e of this this bias bi as and increase their their sales by off offering ering a smalle smallerr reward rew ard sooner in place of a bigger bigger reward rew ard later.
Chapter 3: Fundamental Attribution Error or Correspondence Bias man bumps bumps in to you and walks away without an apology. What What are the immediate thoughts running in your head at that moment about that stranger? You are most definitely summing up a list of all the bad qualities he must ‘obviously’ posses. The truth may very well be the complete opposite. Maybe Maybe he is i s just j ust too distracted distra cted by something something important important and and never intended intended to be rude. This is i s what w hat e call the fundamental attribution error. In face of such events we immediately jump to the conclusion that that a person’ pers on’ss behavior be havior in i n that that particular mom oment ent is not an isolated isol ated event ev ent but but represe repr esen nts his or her permanent permanent ‘traits’. ‘traits’ . We We aut a utom omatica aticall lly y tend tend to disre di sregard gard the possibil possi bility ity of envir environm onment ental al and social soci al influences influences wh w hile il e making making quick quick judgment judgments. s. Th This is prim pri marily ari ly happens happens because be cause our ent e ntire ire focus focus is is on the person. In order to understand what happened, we pick up and interpret that person’s behavioral behavioral cues cues as a reflection re flection of his his personality and completely completely ign ignore any obvious obvious situation situational al cues.
A way to avoid falling prey to this bias is to put yourself in that person’s shoes and think of all the possible even e vents ts th that could could make make you you act the the same same way. way. This This will w ill help you realize reali ze th that we don’t don’t always act ourselves in certain situations.
Chapter 4: Curse of Knowledge “ I am having trouble trouble breathing”, Sam complained to his doctor “The posterior wall of your nasopharynx is inflamed, with hyperemia and acute follicular tonsillitis”, the doctor assured him after a thorough examination “ I am going to die?” Sam asked white as a sheet. “ No..No…I No..No…I meant you have a sore sore throat!” throat!”
Knowledge is power they say but it can become a curse as well. Too much knowledge about anything hinders hinders our abili abi lity ty to to unders understan tand d things things from the the perspe pe rspective ctive of other other less les s inf i nform ormed ed people pe ople.. When When faced with a situation where we are questioned about an area of our expertise we always tend to use argons and technical terms without realizing the high possibility that the other person may not be aware aw are of them them.. What What we once had to learn lea rn ourselves ourselve s becom be comes es comm common knowledge knowledge leadi l eading ng to incorrect assumptions about how much other people understand.
This can be avoided through conscious practice. No matter how much of an expert you are in any area always remind yourself how you were once less informed too. Start off with the basic stuff first to get an idea of what level of understanding your audience stands at. Once you have done that, only then move on to technicalities.
Chapter Chap ter 5: Dunning-Kr Dun ning-Kruger uger Effect Effect my confidently walks in to audition for a local singing competition.
“You seem confident. Do you think you have what it takes to win this competition?” “ I am 110% 110% confident you will love my singing.” Amy Amy replied replied with wit h a broad broad smile. She began singing in her high-pitched voice as the judges stared at her, horrified.
Have you ever come come acros a crosss people pe ople that that you kn know ow are less les s com c ompetent petent yet yet they they confidently confidently claim clai m to be otherwise? This is in fact another cognitive bias called the Dunning-Kruger effect. We tend to deny our failures more than we realize. We fail to acknowledge the gap that exists between our actual performance performance and and how how we perceived per ceived our perform performance. ance. People People who are susceptible susceptible to this this bias lack the capacity to analyze their own performance. Hence, they end up believing they are much more competent than they actually are. In order to make sure we don’t become a victim of this bias we must always accept feedback from others and learn from our mistakes. On th the flip fli p side, si de, highly ighly competent competent people may appear to be humble humble and rate their their competence competence lowe l ower r than it actually is. This is known as the ‘imposter syndrome’. Overachievers tend to believe that tasks that that are ar e easy e asy for them have to be easy eas y for for others others as well we ll.. This is i s why w hy they they end up up downplayin dow nplaying g their their competence as compared to others.
Chapter 6: Framing Effect n a study by Levin and Gaeth (1988) participants enjoyed eating beef which was described as 75% lean as compared to when it was described as having 25% fat.
This cognitive This cognitive bias refers refer s to ou o ur tendency tendency to to reach r each diff di ffere erent nt conclusions conclusions from the the sam s amee inf i nform ormation ation depending on how that information is presented to us. The mere ‘framing’ of a question influences the answer we provide. Studies have shown people preferring an option that is coupled with a perceived positive outcom outcomee as compared compared to th the corresponding corresponding negative egative outcom outcome. e. So if an econom economic ic policy polic y focuses on the employment rate rather than the associated unemployment rate, people are more likely support it. Advertisers warn customers to avoid something by highlighting its negative effects such as anti-smoking campaigns while they focus on only the positive aspect when they want the customers to develop a positive image about a product. Other times they manipulate the same statistics to provide different messages. A product which claims to have 90% efficiency can be advertised by an opponent as having having a 10% chance chance of failing faili ng.. Framing Framing effect effect can c an be avoided a voided by carefu care full lly y think thinking ing throu through gh all the the possibl pos siblee positive positi ve and negative negative outcomes before reaching a final decision.
Chapter 7: Hindsight Bias “ I just got the car painted. I knew k new this was going to happen!” happen!” This is what Mike said s aid when he walked up to his car and noticed scratch marks on the door. Hindsight bias is also called the ‘knew-it-all-along’ effect or ‘creeping determinism’. This occurs hen people believe they predicted the outcome of a recent event, despite having no objective proof to support this claim. Only after the event has occurred do people claim this was likely to happen. This stands true for both positive and negative outcomes. Our dire need to make sense of the world around us makes us susceptible to this bias. Knowing we can predict what happens to us helps us feel safe in an un unpredictable world. worl d. Research Researc h also focuses focuses on how how we recall recal l selective inform information ation related to the the outcome outcome of an a n event to to convince ourselves oursel ves what happened happened was w as supposed to happen. There are two situations where the hindsight bias is more likely effect our thought process: 1. The The impression impressi on of inevitabili inevitabi lity ty:: When When events events are ar e such that that their their cause can be easil eas ily y recogn rec ognized. ized. Example you were mugged because you were walking alone. 2. The impre impress ssio ion n of fore forese seeab eabil ility: ity: When When the the outcome outcome of an event eve nt does not surprise surpri se you. Exampl Examplee your favorite football team lost because their key player was injured. Even though we think being able to predict outcomes provides us comfort, the hindsight bias has its drawbacks as well. It stops us from learning from new experiences and makes us overconfident in our supposed ability to make predictions. This is why people may end up taking huge risks that may be harmful later on. A way to make people realize their prediction abilities may not be true is to question them about why the alternatives did not happen and encourage them to justify their claims. The goal is to make them realize the high chance of things turning out differently than they think.
Chapt Ch apter er 8: Identifi Iden tifiable able Victim Victim Effect Effect n 2012, a 68 year old bus monitor from New York received a total of $700,000, from donors belonging to 84 countries after a video of her being harshly bullied by four middle school students went viral on the internet.
"A single death is a tragedy; a million deaths is a statistic." – Unknown This bias occurs when individuals are more emotionally affected by troubles and hardships of a sin si ngle ‘identifiable ‘i dentifiable victim victi m’ than a larger la rger anon a nony ymous group group facing the the same or greater problem probl ems. s. This is why people are more willing to provide aid to an individual after hearing their personal story. Research Resea rch has shown sim si mply getting getting to know know statistics statistic s about a bout any any event activates the the prefront pr efrontal al cortex hich has no connection to emotions while hearing about the plight of one victim activates the part of the brain responsible for emotions, the limbic system. We are also more likely to get satisfaction from helping one individual because it is very much possible as compared to helping a million people at the same time. Even on a general note, stories have the power to captivate us while statistics are known to bore us. The identifiable victim effect is irrational because we are reacting differently to a tragedy not based on its actual level but its ability to evoke strong emotions in us. This bias gives power to the plight of one individual to eclipse the plight of millions.
Chapter Chap ter 9: Sunk Cost Cos t Fallacy Fallacy or o r Irrational Irrational Escalation Escalation ark bought a $10 movie ticket a week ago. Despite being sick and wanting to rest he decides to o anyway because he believes he would be wasting the money he paid for the ticket.
The concept of sunk costs in economics refers to already paid costs that cannot be recovered. The sunk cost fallacy refers to our tendency to make decisions based on past investments (time, money etc.) People will generally continue with a course of action to justify the investment they have already made despite knowing it will probably cost them even more. The better option of abandoning the previous investm investment ent is ignored. ignored. In the the example example above Mark has fallen prey to sun sunk cost falla fallacy cy by thinking going to the movies even if he is sick helps him save the cost for the ticket. In reality though the ticket has already been paid for and the money will not come back. He is only making his sickness orse by not not resting res ting instead. In order to avoid making irrational decisions in the future simply making yourself aware of sunk cost fallacy can help. You could take some time out to make a list of all the possible pros and cons of continuing with a course of action. If negative outcomes outweigh the positive ones it is better for you to let go of your past investment and move on.
Chapter 10: Loss Aversion arry has the choice to invest his savings of $1,000 into two different investments. The first one romises a possible return of $2,000 after one year but has a 40% risk of complete loss of the investment. The second option guarantees a profit of 15% after 1 year. Why does Harry chose Option 2, although the average profit for option 1 would be 20% and therefore higher than option 1?
Loss aversion refers to our tendency to give more weight to avoiding losses than receiving gains hen making a decision. According to research the psychological value of loss is twice as more as gain. So even if the monet monetary ary valu val ue of the loss los s an a nd gain is the the sam s amee we w e are a re more likely li kely to give give more importance to loss. In other words people feel more negatively about the pain that accompanies loss than they feel positively about the pleasure associated with gain. As a result people end up taking more risks to avoid losing even if it means they would potentially be in a worse position than before. They key to avoiding this bias is to think long-term. Surely it may seem important to try to avoid loss in that very moment. But try to look at the bigger picture and the consequences that may follow. Quick decisions are bad decisions.
Chapter Chap ter 11: 11: Outcome Bias Bias n a study by Baron & Hershey (1988), participants were given a hypothetical scenario about a surgeon deciding deciding to carry carr y out a risky operation. oper ation. The surgeon was shown to be well aware of the success rate. r ate. Participants Partici pants were then told either the t he patient had died or lived. li ved. The surgeon’ surgeon’ss decision to operate was considered a mistake when the patient had died and the right choice when the patient had lived.
As the name suggests, this bias refers to our tendency to assess the quality of a decision based entirely on the knowledge of its outcome. Hence, a decision which leads to a positive outcome will be viewed viewe d positively. positively. Likewis Likewise, e, a decision decisi on which which leads to a negative negative outcom outcomee will w ill be viewed view ed negativel negatively y. Events that that lead le ad to the decisi dec ision on and and other im i mportant factors are ar e ign i gnored ored and our entir entiree focus focus becom be comes es the the outcome. outcome. This is irratio ir ration nal think thinking ing because outcom outcomee is i s just j ust one one part pa rt of the big picture. picture. This This bias bia s is stronger stronger for outcom outcomes es that that are negat negative ive and largely largely based on chance. chance. Outcome bias actually becomes a hindrance in our learning experience. There can be a lot of factors responsible for a particular outcome yet we choose to overlook them. How else will we learn to make better decisions? A way to avoid this bias is to understand the process that went on in making and execution execution of that that decisi dec ision. on. Try Try to focus focus on o n the the condition c onditionss that lead lea d to that decision. decis ion. Regardless Regardle ss of the the outcome outcome one must must critica cr iticall lly y analyze analyze their their decisi deci sions ons from an objective objec tive point po int of view to make make sure mistakes are avoided avoi ded in i n the the future. future.
Chapter 12: Overconfidence Effect “ I have the address. Do you have the GPS navigator?” Sally asks Jarred before they leave to the housewarming party of their friends. “What for?, I know every street in the city and don't need a GPS”. GPS”. Two Two hours later Jarred and Sally arrive arri ve at the party part y which would have been a one hour drive, if they wouldn't wouldn't have lost their way three times.
This cognitive bias describes our tendency to be overly confident in our judgments which in reality are not objectively accurate. In simpler words overconfidence effect is the difference between what people actually actually kn know and what what th they think they they know. Surprisingly people who are experts are more likely victims as they refuse to accept limits to their knowledge. Research has shown high levels of confidence to be associated with high levels of overconfidence. The overconfidence effect can be avoided by thinking about how you received the information that is the basis of your judgment. If it turns out your information was gathered from unreliable sources and lack objectivity it is time to re-evaluate your judgment and consider seeking better sources.
Chapter Chap ter 13: 13: Risk Risk Compen Com pensation sation or Peltzman Effect “Can you you please drive a little li ttle slower? s lower?” ” “ I installed inst alled new seat belts bel ts and airbags last week. You You don’t don’t have to worry about anything!”
The risk compensation bias comes from our tendency to adjust our behavior based on the level o perceived percei ved risk. We We tend tend to take take more more risks ri sks when when we feel protected and and safe. This This theory came came to light light after it was observed that road safety interventions were in fact having an opposite effect. The term ‘Peltzman effect’ is named after Sam Peltzman’s classic study (1975) which reported that people believe they they can afford afford to be reckless when they they are following autom automobile obile safety laws. law s. Th Thee risk compensation bias is also observed in contact sports like rugby and ice hockey. New rules for player action had to be implemented only after it was observed that players acted more violently with each other when they had their protective equipment on. From a more psychological point of view, Gerald J S Wilde explains this behavior through his theory of ‘risk homeostasis. According to this theory risk is an inherent part of our nature. We all have a ‘target level of risk’ which determines our behavior. If the perceived risk in a situation is higher than this level we act to reduce it and if it is lower we engage in dangerous activities to get back to our target target level. level . A way to avoid falling prey to this bias is to check your behavior in risky situations. If you realize you are taking more risks because you feel safe you need to modify your behavior because there is a chance your perceived sense of safety is way more than the actual safety. The world is an unpredictable place and even complete safety does not guarantee a predictable outcome. As wise people say: ‘ Better safe s afe than sorry’ .
Chapter 14: Halo Effect Whether you know any personal details about a good looking hero in your favorite movie or not, it is very likely li kely that you believe that person is smart, friendly and fun fun to be with in real real life. lif e.
The halo effect was first introduced by psychologist Edward Thorndike. We fall prey to this bias hen we determine specific personality traits of someone by generalizing their overall impression. Halo effect includes both negative and positive directions. Disliking a certain aspect of something predisposes us to th think negatively egatively about about every other other thing thing related to it. Likewise Likewise likin l iking g a certain aspect makes us view every other thing in a positive light. Research has shown that people tend to attribute positive traits to people who are perceived as physically attractive and negative traits to those who are not. This is why it is also called the ‘physical attractiveness stereotype’ and the ‘what is beautiful is good’ principle. Isn’t this very obvious in the way we judge celebrities? Although the halo effect is a mental shortcut which helps us make decisions quickly, there’s a high chance chance our impressions impressi ons may may be false. fal se. Th Thee only way wa y to avoid this this is to ask yourse yourself lf whet w hether her someone someone actually has a certain quality or you are just assuming they do based on what you like about them.
Chapter Chap ter 15: Illusi Illusion on of Asymm Asy mmetri etricc Insight “ I know you better than you know me” “ I know you better than you know yourself”
How many times have you come across these phrases? We become a victim of this bias more often than we think. The illusion of asymmetric insight makes us believe that our knowledge about others not just surpasses their knowledge about us but their knowledge about themselves as well. This happens even on a group level where an in-group believes they understand members of the out-group better. better. We We tend tend to belie believe ve our our thou thoug ghts and and perceptions perceptions are accu acc urate. This This illusion il lusion eclipses ecli pses our ability to look at the other person as a complex being. We start seeing ourselves as complicated and others as simple and predictable. Any view that contradicts our thoughts and perception is seen as a deviation from the ‘right way’. What we are lacking here is the ability to look at things from multiple perspectives. We must consciously evaluate our own thinking process. We cannot just assume others don’t understand us or e know know them them better. better. If others others are providing provi ding logica logicall explanations, explanations, their view point may may just be righ r ight. t. Being open-minded is the key here. Close-mindedness will lead us nowhere.
Chapt Ch apter er 16: Self-Serving Self-Serving Bias Bias “ I aced this test t est because I studied hard. I failed the last l ast one because the teacher t eacher purposely used ‘trick’ questions questions to make it difficult.” This statement clearly implies that whoever said it is taking full credit for passing a test while blaming blaming it on the the teacher teacher for failing a previous one. one. This This is i s called call ed the the self-serving self-ser ving bias. We We have have the the tendency to attribute positive events to our own internal characteristics and attribute negative events to external forces that are out of our control. It stems from our tendency to attribute causes to any behavior behavior (attribution (attribution theory) theory) in terms terms of personality personality traits traits or environm environmental ental influen influences. ces. We We engag engagee in this bias because we want to protect our self-concept from getting hurt. We try our level best to see ourselves in a positive light. Hence we go to extreme lengths to justify anything that is seen as a threat to our precious self-concept. The same bias also happens at a group-level as well. The self-serving bias blocks our capacity to grow further because we never realize our own mistakes. Now that that you you know this this bias ex e xists the the next next step is to prepare you yoursel rselff to to be open to failures. failures. We We are boun bound to fail fail one tim timee or the the other other at some some point. point. Accepting Accepting failures and and learning learning from them them is wh w hat helps us grow.
Chapt Ch apter er 17: Illusion Illusion of Truth Truth Effect Effect or o r The Truth Truth Effect Effect Do you consider these treatments true? tr ue? Anti-bact Anti-bacterial erial soaps s oaps kill 99.9% germs. Junk food is unhealthy. You need to shampoo your hair everyday
Did you give your answer right away or did you actually do some empirical research to reach a conclusion? In most most cases ca ses the the former is i s true. The more we w e are a re exposed to certai c ertain n inform information ation the the more we are likely to believe it is the truth whether we have evidence to support it or not. Ever ondered why advertisements are repeated over and over again? It may seem absurd that repetition of a certain message can have such a profound effect on our judgment. But this is exactly what psycholog psychological ical research resear ch has foun found out. out. In In fact on onee of th the most most effect effective ive meth methods ods for persuasion persuasion is repetition. We automatically tend to consider those statements valid which we have heard before as compared to hearing something for the first time. This can be partly understood through the concept of cognitive cognitive fluency fluency.. We We prefer pr efer to use less le ss effort to process proce ss information. information. Since a repeated repe ated message becomes becomes famili familiar ar and hen hence ce easier easi er to process, we hold on to it. it.
We are a re constantly constantly manipulated manipulated by the the media an a nd other sources source s of power po wer to accept acc ept their opinion opi nionss through the Illusion of truth effect. Knowing that it exists can take you a long step ahead in recognizing here it is being used. Before blindly following the trend, we must do our own research and be open to other options as well.
Chapter 18: Spotlight Effect
magine walking down the stairs st airs in i n a crowded crowded mall and tripping t ripping at the very ver y last step. You You are red red with embarrassment as you picture a hundred pair of eyes looking at you. Or imagine walking in to a party, flaunting your new hairstyle, expecting compliments from everyone you meet. How about I tell you the number of people who are actually noticing you is way less than you imagine?
The spotlight effect quite literally makes us believe we are under a constant spotlight when in reality that is not the case. We overestimate the number of people that are consciously paying attention to our actions. Studies suggest egocentrism to be the root cause of this bias. We are so focused on our own actions we have a hard time imagining other people are not that focused on us. Since we use our own experiences experie nces to unders understan tand d the world wor ld around around us, a minor mishap that that we w e think think everybody witnessed, is actually of little li ttle concern to them. them. We We als a lso o tend to believe beli eve our thoug thought htss an a nd perceptions per ceptions are a re objective objec tive and accurate hence other people must be thinking the same thing. This is why we end up evaluating other other people’s peopl e’s cognitions cognitions through through our experien experie nce and overestimat overe stimatee the probabil proba bility ity of having having simil similar ar perceptions. perceptions.
Remind yourself that others are just as focused on themselves as you are on yourself. Whether they notice notice you or not, not, other people’s peopl e’s opinion opi nionss shou s hould ld not define define your your reali rea lity ty or effect your your actions. a ctions.
Chapter 19: Survivorship Bias
You see one successful politician. What about the hundred others who never won the election? You see one successf s uccessful ul business busines s man. What What about the t he hundred others who set up a business that didn’t work? You see one successf s uccessful ul author. author. What about the hundred others who could not get their t heir work ublished?
The survivorship bias describes our tendency to extract useful information from successes while ignoring the same from failures. We are more interested in finding out how something ‘survived’ and succeeded rather than how it failed and ended. We are inspired by real life examples of anyone reaching new heights of success. However, we fail to acknowledge the most important lesson of ‘what-not-to-do’ while aiming for success. We are deprived of this crucial lesson because it never makes it to the headlines and inspirational speeches. Only the success stories become our ‘ frame-ofreference’ . This thinking is considered irrational because what we think is some magic trick for surviving may just be sheer luck.
Focusing only on success stories gives us unrealistic expectations of succeeding in the real world. We must remind ourselves wherever there is a chance of success, failure may not be too far behind. Hence learning from failure is a key to success as well. Researching about the other side of the coin can help us avoid the survivorship bias.
Chapter 20: Availability Bias
The winner of a lottery ticket receives a lot of media attention. This gives us the idea that wins occur more frequently while in reality they are very rare. That one isolated incident becomes enough enough to convince us to buy a lottery ticket for f or ourselves.
The availability bias is a mental shortcut that enables us to make sense of the world on the basis of the immediate information that comes to our mind. We tend to remember rare happenings more than comm common ones. ones. Hence, quick decisions decis ions are ar e based ba sed on overestim overes timation ation of the the frequen fre quency cy of a few dramatic and vivid incidents that are easier to recall. Watching the news highlighting a recent case of child abduction will make us fear for our children. Just like an airplane crash will make us think twice about travelling by air. However sometimes denial makes us underestimate the probability of a negative event.
A way to avoid this bias is to research and find out the true story behind any news. Decisions should be made made on an objective basis. Facts and data data will wil l help us us get to a soun sound decision more more often often than than ou our r instincts. If we take take som s omee time out to to rem re mind ourselves oursel ves of how how comm common the the alternative a lternative is, we can escape this bias.
Chapter Chap ter 21: The Swi S wimm mmer’s er’s Body Illusion Illusion
Does swimming swimming give swimmers an athletic athleti c body or are are they born with a physique that naturally nat urally acilitates swimming? re the top rated universities actually the best or do they handpick handpick the most brilliant students? s tudents? Does makeup actuall actuallyy make models models look attractiv att ractivee or were were they born with attracti att ractive ve feature?
The swimmers body illusion refers to our tendency to confuse ‘ selection select ion factors with results ’. We believe following follow ing a strict diet and and exercis exercisee regimen regimen of of a swimm swimmer can help help us get get th the phy physique of a swimmer. In reality though, swimmers are born with certain physical characteristics such as elongated arms that naturally becomes a factor of selection in the swimming world. This bias is frequently used by advertisers to sell their products. They make us believe we can achieve similar results by making us identify with an already gifted model. This illusion tricks us into thinking a particular product product will get us us the the results we saw in i n the the advertisemen advertisement. t.
Having realistic expectations can help us see past this illusion. All of us are born with unique abilities. Perhaps we should strive to use them in the best possible way instead of wasting our time on achieving the the im i mpossible possi ble
Chapt Ch apter er 22: Negativity Negativity Bias
Your teacher just told you “You “You are an exceptionally exceptionall y good student but you can never be the same s ame at sports” re you focusing on the praise or the insult?
The negativity bias refers The refer s to our tendency to to give more im i mportance to negative negative events as compare compared d to positives ones of the the same same intensit intensity y. Any Any such isolated isola ted event event has has the the power to wash away any any pleasurable experience. We We let negat negativity ivity have a profoun profound effect effect on ou ourr lives. li ves. According to neuropsycholog neuropsychologis istt Rick Henson, Henson, the part of our brain br ain responsibl re sponsiblee for emotions, emotions, immedia immediately tely responds res ponds to bad news and saves it in our long term memory. Evolutionary psychology says this is a part of our innate fight-or-flight response which helped our ancestors survive in the wild. Research has also shown evidence about the innate nature of this bias. Adults and even babies, as young as six months old, take take less l esser er time time to recogn r ecognize ize an angry angry face than a happy one. one. We We also a lso give more more credibi cre dibili lity ty to negative information
Negative Negative events events do hold hold imm immense ense power over ou ourr emotion emotions. s. Regardles Regardlesss of th that we need need to train train ourselves to be mindful about the positive events as well. This will help in focusing on the positive event making it a permanent part of our long term memory. These moments can then be recalled with ease whenever something negative happens to balance the negativity.
Chapter 23: Anchoring Effect
“This $50 shirt is too t oo expensive for me” “We have this t his piece pi ece on sale. sal e. You You can get it i t for f or 25% off” off ” “That sounds like a good deal. I will buy it. ”
We have a tendency tendency to rely rel y heavi heavily ly on the the first fir st in i nformation formation we receive rec eive.. Any decisi deci sions ons or evaluations e valuations that we make are influenced by this ‘anchor’ which becomes our reference point. We tend to adjust our decisi deci sions ons from this this reference refer ence point poi nt only only.. The reason re ason we w e have difficu di fficulty lty predicting predi cting our futu future re emotions is because our reference point is our current emotional state. Hence the first impression or perception that that we mak makee of any anything thing stays stays with wi th us no matter atter how mu much we claim cl aim to have have analyz analyzed ed all possible factors in mak making ing a decision decisi on.. The The anchoring anchoring effect effect greatly greatly influ influences ences th the amou amoun nt we pay for products. products. In In the the example example above the the person has has boug bought a $50 sh shirt irt only only after after they they were told they they can get get it for $37.5. When they used the set price as a reference point, the deal actually does look pretty good. They get to save $12.5. Except that the same shirt is available for $30 at another shop. Since we are unaware, we walk away happy from a situation like this believing we paid far less than the original amount (reference point). However, the effect of anchoring bias is not only limited to money. A person, who who kn knows branded shirts shirts are of good good quality quality,, will wil l only only use use that that as their their buying buying criteria criteri a while not actually checking the actual quality.
The anchoring bias is used far more often than we realize and is difficult to avoid. We need to be able to get out of this mindset. A way to do this is to make a habit of comparing things. Whether it’s your emotions, prices or characteristics, just sticking to one will end up biasing your evaluation capability. We must always be open to alternative options. You could also try to avoid making quick decisions ithout thinking them through.
Chapter Chap ter 24: Confi Con firmation rmation Bias Bias “The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it.” – Francis Bacon
Confirm Confirmation ation bias bia s descr de scribes ibes our tendency tendency to to searc se arch h for for and interpr interpret et tings tings in i n a way wa y that that ‘conf ‘c onfir irm ms’ our our own long-held beliefs. Interestingly we may even feel like we are using a rational approach but in reality we are only testing and confirming what we already believe to be true. We tend to favor any information that complements our point of view and reject alternatives. We make an effort to look for such evidence and give great importance to it. It greatly effects how people collect, analyze and recall information. information. Our Our think thinking ing autom automatical atically ly becomes selec se lective. tive. At one one point poi nt,, we w e becom be comee excessi e xcessively vely adamant on our view because we have collected a lot supporting evidence over time. We even surround ourselves with people who agree with our views.
We must make an effort to challenge our own thoughts from time to time. Try using an unbiased source of information information and un understan ders tand d how others differ in i n their their opinions. Being Bei ng part of a diverse dive rse group that that can challenge your notions can help tremendously.
Chapter 25: Bias Blind Spot famous politician was interviewed about his views on an important issue.
“ All All my opinions are based on facts. I never make decisi ons without considering consideri ng all the possible possi ble aspects. People who are opposing me do not have their facts straight. Their arguments simply lack rationality.”
Research has proven we all have a bias blind spot of varying degrees. This is our tendency to confidently believe we are less biased than other people. This basically sums up how we reason all the cognitive biases. We refuse to believe we use all these biases while arguing that other people clearly do. This is because we have grown so used to seeing the world through that mind frame, it is near impossible for us to accept that our thinking pattern is biased. We strongly believe what we know kn ow is factual factual and anyone anyone who challeng chall enges es us is simply in denial denial of reali rea lity ty.. We We don’t consider conside r it i t to be their opinion. The bias blind spot happens because it is in our nature to see ourselves in a positive light. We cannot stand the thought of accepting that we are not as rational as we think we are. Another reason is our tendency towards ’naive realism’- believing our understanding of the world is objective and reality based. This creates a huge problem in the way of avoiding biases. Knowing we fall prey to biases from time is time is the first step towards learning to control them.
Conclusion We all a ll have fallen falle n victim to to these cogn c ognitive itive biases, bias es, probably probab ly to all al l of o f them them and and more more then then once. once. Being aware of their existence will warn you next time before you feel the temptation to jump to a conclusion. Knowing about these common cognitive biases will also help you to understand the decision making process of your fellow humans better. If you see, that a friend of yours is being biased, share with wi th him or her what what you you've 've learn lear ned, so that that he he or she can also make make bett better er inform informed ed decisi deci sion onss in the the futu future. re. The author of this book hopes that you have enjoyed this short read and is happy to receive your feedback, stories and ideas for future editions by email at
[email protected] [email protected].. Thank you very much. Enjoy En joy life and practice awareness! awar eness! Your Charles Holm
