Cognitive biases

Cognitive biases are known shortcuts that our brains take when we make decisions or form opinions. They are tempting because they allow us to make quick decisions with an aura of intuition or gut feeling around them that, we believe, gives them validity. Most of the time, though, the attractive low upfront cost is not worth the long term high interest rate we will have to pay. Making decisions while ignoring these biases is like furnishing your house with cheap and low quality items hoping to save money. You will be so busy later on “paying” the interest of your bad decisions that you won’t have time to do anything else.

We all come equipped with these dubious features and they affect us in all areas of life. They affect us when we are deciding what to eat, what to do with our savings, which school to send our kids to, what to do during weekends, who to share our lives with, etc. An effective way to reduce or even eliminate their negative impact is to be aware of them and to question what you are telling yourself while making important decisions. For best results I suggest combining this awareness with habit changes and slowly compile your own collection of cognitive biases.

Here are some of the most common cognitive biases:

Confirmation bias

It’s the tendency to seek information or opinions that match our beliefs and disregard opinions against. For example if you believe in the existence of aliens you will tend to seek evidence in favor of your point of view and discredit evidence against their existence.

It’s irrational because you have no warranties that your opinion is right or sound. A rational reaction would be to be open and understand opposing points of view better than your adversaries. You should actually look forward to find evidence and opinioins against your points of view because either your opinion is wrong and you realize it or your opinion is right and you become more confident about it.

Social proof

The tendency to believe that if many people approve of something it must be good. For example when your mom asked you if you would jump from a bridge if all your friends did and you replied “yes” you were relying on social proof.

It’s irrational because you have no reasons to believe that the group is behaving rationally. A rational reaction would be to stop to think about why you are doing things and to make sure that you don’t do something you are not fully convinced about.

Moral licensing

The tendency to believe that doing something good entitles us to do something bad. Eg: I am saving this company one million dollars a year so it’s ok if I steal one hundred dollars.

It’s irrational because behaving according to our values and goals is just evidence of our commitment, going against our values (stealing) because we have followed our values (saving the company money) makes no sense. A doctor that saves ten lives a day is not entitled to kill someone at night just for fun.

Halo effect

The tendency to ignore the badness in something because it has a tiny fraction of goodness. For example if we see chocolate cookies and the packaging says they have five percent fibre we tend ignore the fact that they are chocolate cookies and we believe we are doing ourselves a favor because they have fibre.

It’s irrational because of pure arithmetics: 5% good minus 95% is still 90% bad. A rational reaction would be to trust the hard cold math that holds skyscrapers and bridges together.

Sunken cost fallacy

The tendency to not let go of things that are costing us more than we get back because of the monetary, time or emotional investment we have put on them. For example some people tend to stick with their significant others when they are unhappy because they feel that with the amount of time and effort invested in the relationship it has to survive no matter what.

It’s irrational because the longer we stay in that situation the greater our losses. A rational reaction would be to let go as soon as possible in order to minimizes our losses.

Anchoring

The tendency to give a lot of weight to the first piece of information that we come across regarding any topic and to judge additional data around that first piece of information. For example if I ask you “What is the population of Turkey?” you will probably give me a different answer than if I comment right before that “I believe the population of Turkey is close to 40 million people”.

It’s irrational because there is no reason to believe that the first piece of information you got is more or less relevant than the rest or is even right. A rational reaction would be to individually determine how likely each piece of evidence is to be true regardless of the order in which you come across them.

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