57 Cognitive Biases That Screw Up How We Think

People aren’t as rational as we would like to think.

From attentional bias — where someone focuses on only one or two of several possible outcomes — to zero-risk bias — where we place too much value on reducing a small risk to zero — the sheer number of cognitive biases that affect us every day is staggering.

Understanding these biases is key to suppressing them — and needless to say, it is good to try to be rational in most cases. How else can you have any sort of control over investments, purchases, and all other decisions that you make in your life?

To convey the breadth of cognitive biases, we’ve picked out 57 of the most notable ones from a much longer list on Wikipedia. [Aimee Groth contributed to an earlier version of this article.]

Backfire effect

When you reject evidence that contradicts your point of view or statement, even if you know it's true.

Read more about the backfire effect.

Bandwagon effect

The probability of one person adopting a belief increases based on the number of people who hold that belief. This is a powerful form of groupthink.

Read more about the bandwagon effect.

Belief bias

A bias where people make faulty conclusions based on what they already believe or know. For instance, one might conclude that all tiger sharks are sharks, and all sharks are animals, and therefore all animals are tiger sharks.

Read more about belief bias.

Clustering illusion

This is the tendency to see streaks or clusters in random events. A gambler after watching a red come up multiple times in a row on a roulette table may erroneously conclude that red is hot. In a related bias, known as cognitive bias, the gambler may conclude that black is particularly likely to come up since it hasn't come in a while. In fact, the results are always random.

Read more about the gambler's fallacy.

Confirmation bias

A tendency people have to believe certain information that confirms what they think or believe in.

Read more about confirmation bias.

Conservatism bias

Where people believe prior evidence more than new evidence or information that emerged. People were slow to accept the fact that the earth was round because they tended to believe earlier information that it was flat.

Read more about conservatism.

Curse of knowledge

When people who are smarter or more well informed can not understand the common man. For instance, in the TV show 'The Big Bang Theory' it's difficult for scientist Sheldon Cooper to understand his waitress neighbour Penny.

Read more about the curse of knowledge.

Decoy effect

A phenomenon in marketing where consumers have a specific change in preference between two choices after being presented with a third choice.

Read more about the decoy effect.

Denomination effect

People are less likely to spend large bills than their equivalent value in small bills or coins.

Read more about the denomination effect.

Galatea Effect

Galatea by Raphael

Where people succeed because they think they should.

Read more about the Galatea effect.

Herding

People tend to flock together, especially in difficult or uncertain times.

Read more about herd behaviour.

Hindsight bias

The tendency to see past events as predictable. 'I knew all along Philip Phillips would win American Idol.' Sure you did...

Read more about hindsight bias.

Hyperbolic discounting

The tendency for people to want an immediate payoff rather than a larger gain later on. Most people would rather take $US5 now than $US7 in a week.

Read more about hyperbolic discounting.

Inter-group bias

We view people in our group differently than we would someone in another group.

Read more about inter-group bias.

Irrational escalation

Investing more money or resources into something based on prior investment, even if you know it's a bad one. 'I already have 500 shares of Lehman Brothers, let's buy more even though the stock is tanking.'

Read more about irrational escalation.

Less-is-more effect

With less knowledge, people can often make more accurate predictions.

Read more about less-is-more effect.

Observer-expectancy effect

Our expectations unconsciously influence how we perceive an outcome. Researchers, for example, looking for a certain result in an experiment, may inadvertently manipulate or interpret the results to reveal their expectations. That's why the 'double-blind' experimental design was created for the field of scientific research.

Read more about observer-expectancy effect.

Ostrich effect

The decision to ignore dangerous or negative information by 'burying' one's head in the sand, like an ostrich.

Read more about the ostrich effect.

Overconfidence

We are too confident about our abilities, and this causes us to take greater risks in our daily lives.

Read more about overconfidence.

Overoptimism

When we believe the world is a better place than it is, we aren't prepared for the danger and violence we may encounter. The inability to accept the full breadth of human nature leaves us vulnerable.

Read more about optimism bias.

Pessimism bias

This is the opposite of the overoptimism bias. Pessimists over-weigh negative consequences with their own and others' actions.

Read more about pessimism bias.

Placebo effect

A self-fulfilling prophecy, where belief in something causes it to be effective. This is a basic principle of stock market cycles.

Read more about placebo effect.

Post-purchase rationalization

Making ourselves believe that a purchase was worth the value after the fact.

Read more about post-purchase rationalization.

Pro-innovation bias

When a proponent of an innovation tends to overvalue its usefulness and undervalue its limitations.

Read more about pro-innovation bias.

Recency

The tendency to weight the latest information more heavily than older data.

Read more about recency.

Restraint bias

Overestimating one's ability to show restraint in the face of temptation.

Read more about restraint bias.

Self-enhancing transmission bias

Everyone shares their successes more than their failures. This leads to a false perception of reality and inability to accurately assess situations.

Read more about self-enhancing transmission bias.

Stereotyping

Expecting a group or person to have certain qualities without having real information about the individual. This explains the snap judgments Malcolm Gladwell refers to in 'Blink.'

Read more about stereotyping.

Survivorship bias

An error that comes from focusing only on surviving examples, causing us to misjudge a situation. For instance, we might think that being an entrepreneur is easy because we haven't heard of all of the entrepreneurs that have failed.

It can also cause us to assume that survivors are inordinately better than failures, without regard for the importance of luck.

Read more about survivorship bias.

Zero-risk bias

The preference to reduce a small risk to zero versus achieving a greater reduction in a greater risk.

This plays to our desire to have complete control over a single, more minor outcome, over the desire for more -- but not complete -- control over a greater, more unpredictable outcome.

Read more about zero-risk bias.

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