Systematic pattern of deviation from norm or rationality in judgment due to subjective perception of reality.
Cognitive biases are systematic errors in thinking that affect the decisions and judgments that people make. They are often a result of our brain's attempt to simplify information processing. They are rules of thumb that help us make sense of the world and reach decisions with relative speed. However, they can also lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.
In this unit, we will explore some of the most common cognitive biases that can distort our thinking.
Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses. It is a powerful type of bias that can affect us in all areas of our lives, including our political views, our beliefs about ourselves, and our interactions with others. For example, if we believe that we are very intelligent, we are more likely to remember instances that confirm our intelligence and forget those that do not.
Anchoring or focalism is a cognitive bias where an individual depends too heavily on an initial piece of information offered (known as the "anchor") when making decisions. For instance, if you are negotiating the price of a car and the seller suggests a price, that initial number will often "anchor" your subsequent negotiations, influencing how high or low you are willing to go.
The availability heuristic is a mental shortcut that relies on immediate examples that come to mind. When you are trying to make a decision, you might quickly recall similar situations or experiences, and base your decision on that anecdotal evidence. However, this can lead to biases because our memories are not always a perfect representation of reality. For example, people might judge the probability of a car accident to be higher after seeing a car crash in the news, even though the actual probability has not changed.
Survivorship bias is the logical error of concentrating on the people or things that made it past some selection process and overlooking those that did not, typically because of their lack of visibility. This can lead to overly optimistic beliefs because failures are ignored. For example, if we focus only on the successful startups in Silicon Valley and ignore the numerous failures, we might conclude that starting a tech company is an easy way to become rich.
Understanding these common cognitive biases is the first step towards overcoming them. In the next unit, we will explore mental models that can help us mitigate these biases and improve our decision-making processes.
My dude, any questions for me?