(Inc) 6 Cognitive Biases That Are Messing Up Your Decision Making
Forewarned is forearmed: the human mind is riddled with dangerous blind spots and illogical shortcuts.
By Jessica Stillman @EntryLevelRebel
Over millions of years of evolution you’d think your brain would have gotten pretty good at thinking. But the truth is natural selection hasn’t been nudging our brains to be ever more rational. It’s been nudging them to keep us alive. Those aren’t always the same thing.
If our brains were bad at spotting predators, running away from danger, and evaluating possible friends and enemies quickly, the human race would have died out long ago. The trouble is, avoiding hungry lions is no longer the main task we use our brains for. These days we expect them to make rational decisions.
Turns out that’s one thing they’re not so well equipped to do. According to an incredibly fascinating body of social science (made most famous by the work of Nobel prize-winning psychologist Daniel Kahnemann) our minds are riddled with a host of cognitive biases that help us act quickly in the face of danger but make accurately weighing evidence, assessing probabilities, and deciding logically often pretty difficult.
Forewarned is forearmed, and knowing about these biases can help you recognize and correct for them. But if you don’t have time to read excellent but in-depth books on the subject, here’s a quick cheat sheet of some of the most common errors to watch out for.
1. Confirmation bias
I’m not sure how this one evolved, but I’m absolutely certain I’ve seen it in action. Humans don’t like to change their opinions. Rethinking our beliefs once they’ve formed is hard and uncomfortable. It’s much easier to simply ignore information that calls our most cherished ideas into question than it is to engage with threatening new information. So, often, that’s just what we do. It’s called the confirmation bias.
2. Availability heuristic
Our brain has a simple shortcut for estimating probability — how easy is it to recall something similar? But there’s at least one huge problem with this approach. Big, terrifying events are easier to recall than run-of-the-mill ones. That’s why so many people are afraid of plane crashes, child abductions, and terrorism, which in reality are extremely rare, and blasé about car accidents, which kill more than a million Americans a year. (Alarmist news broadcasts don’t much help us get an accurate sense of events’ actual frequency either.)
This one is beloved by business people setting prices, but beware anchoring if you’re a consumer. The term refers to our tendency to stubbornly cling to a number once we hear it and evaluate all other offers based on that previous number, even if that isn’t the most relevant bit of information. So tell people they are limited to ‘four per customer’ and they’ll be much more likely to buy four of whatever you’re selling, even though they were originally only intending to buy two and really don’t need double that.
4. Halo effect
Human brains are lazy and like consistency, that includes ideas that are consistent about a particular person or entity. Internal contradictions take up a lot of metal resources. That’s why, when someone makes a positive impression with their small talk and self presentation in the first minutes of a job interview, you’re more likely to view their professional accomplishments as similarly positive later. Your good first impressionthrows a hazy halo of positivity over all subsequent information.
5. Sunk cost fallacy
The everyday expression for this bias is ‘throwing good money after bad.’ The idea is that once we’ve invested time and/or money in something, we become vastly less likely to abandon it, even once it should be clear that the project will ultimately fail. The result is we frequently end up losing far more than if we had taken the hard decision to cut our losses early.
6. Survivorship bias
Success stories are easy to spot. Failures that sunk quietly into non-existence much less so. That’s why we commonly over-estimate the likelihood of success in risky ventures. Just ask any startup veteran who has been disabused of his starry-eyed optimism over several years in the industry if you don’t believe me.
This is also why we often put too much stock in the strategies of particular successful people — like dropping out of school. We remember the Bill Gates and Mark Zuckerbergs of the world and forget to factor in the vast numbers of quietly struggling dropouts when we mentally calculate how likely an action (ditching school) is to lead to an outcome (striking it rich as an entrepreneur).
This only a small sample of the massive list of biases that afflict the human brain, so if you want to learn more, check out an exhaustive resource on the subject from Slack’s Buster Benton, or a less lengthy but still very useful guide from James Clear.