25 reasons what you think is
right is wrong – cognitive biases
Cons481
Bias blind spot
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the tendency not to compensate
for one’s own cognitive biases
Even when told you are biased
you WILL underestimate the
effects
Bandwagon effect
the tendency to do (or believe) things
because many other people do (or
believe) the same
„ Related to groupthink
„ The general rule is that conduct or
beliefs spread among people, as fads
clearly do, with "the probability of any
individual adopting it increasing with the
proportion who have already done so"
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Choice-supportive bias
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Confirmation bias
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the tendency to search for or interpret
information in a way that confirms one’s
preconceptions
Tradition, superstition, religion, worldview, or
ideology can allow a believer to give a greater
weight to some data over other data
Choice is often unconscious and quick, this
can be seen as making these unconscious
choices make sense
the tendency to retroactively ascribe
positive attributes to an option one has
selected
Older adults are more likely than
younger adults to show choicesupportive biases
related to cognitive dissonance
Congruence bias
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the tendency to test hypotheses
exclusively through direct testing
People generally ignore alternative
hypotheses
2-4-6 example
1
Contrast effect
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the enhancement or diminishment of a
weight or other measurement when
compared with recently observed
contrasting object
You are judged more
physically attractive if
you are standing next
to your ugly friend
Disconfirmation bias
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the tendency for people to extend
greater critical scrutiny to information
which contradicts their prior beliefs
Same as confirmation bias in reverse
Focusing effect
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placing too much importance on one
aspect of an event
Also known as the anchoring effect
Using odometer readings to value a
used car over maintenance records
Are Californians happier than the rest of
us?
Déformation professionnelle
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the tendency to look at things according
to the conventions of one’s own
profession, forgetting any broader point
of view
professional training distorts your
worldview
"When you have a hammer, everything
looks like a nail"
Endowment effect
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the tendency for people to value
something more as soon as they own it
inconsistent with standard economic
theory willingness to pay (WTP) should
= willingness to accept (WTA)
Hyperbolic discounting
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People generally prefer smaller, sooner
payoffs to larger, later payoffs
However when the same payoffs are
distant in time, people tend to prefer
the larger, even though the time lag
from the smaller to the larger would be
the same as before
2
Illusion of control
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the tendency for human beings to
believe they can control or at least
influence outcomes which they clearly
cannot
Superstitions, etc.
Information bias
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the tendency to seek information even
when it cannot affect action
Fallacy that if we can get more
information we can make better
decisions
Information that is not worth knowing
is not worth acquiring
Neglect of probability
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the tendency to completely disregard
probability when making a decision
under uncertainty
Seat belt example
Impact bias
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the tendency for people to overestimate
the length or the intensity of the impact
of future feeling states
Applies to both positive and negative
emotions
Loss aversion
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the tendency for people to strongly
prefer avoiding losses over acquiring
gains
People are generally risk averse
The pain of losing $100 is greater than
the pleasure of winning $100
Mere exposure effect
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the tendency for people to express
undue liking for things merely because
they are familiar with them
Zajonc experiments
3
Omission bias
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The tendency to judge harmful actions
as worse, or less moral, than equally
harmful omissions (inactions)
Cell phone example
Outcome bias
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Planning fallacy
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the tendency to underestimate taskcompletion times
Low probability interferences are
dismissed
Overhead time underestimated
the tendency to judge a decision by its
eventual outcome instead of based on
the quality of the decision at the time it
was made
Surgery example
Pseudocertainty effect
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the tendency to make risk-averse choices if the
expected outcome is positive
but make risk-seeking choices to avoid negative
outcomes
Epidemic strikes 600 people
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Selective perception
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The tendency for expectations to affect
perception
If you believe it, you make it true
Similar to the placebo effect
Treatment A =
Treatment B =
72% chose A
Treatment A =
Treatment B =
78% chose B
200 live
1/3 chance 600 live, 2/3 all die
400 die
1/3 chance all live, 2/3 all die
Status quo bias
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the tendency for people to like things to
stay relatively the same
4
Von Restorff effect
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the tendency for an item that “stands
out like a sore thumb” to be more likely
to be remembered than other items
South Park OJ example
Zero-risk bias
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preference for reducing a small risk to
zero over a greater reduction in a larger
risk
prefer small benefits that are certain to
large ones that are uncertain
5