We like to think we’re rational human beings.
In fact, we are prone to hundreds of proven biases that cause us to think and act irrationally, and even thinking we’re rational despite evidence of irrationality in others is known as blind spot bias.
The study of how often human beings do irrational things was enough for psychologists Daniel Kahneman to win the Nobel Prize in Economics, and it opened the rapidly expanding field of behavioural economics. Similar insights are also reshaping everything from marketing to criminology.
Hoping to clue you — and ourselves — into the biases that frame our decisions, we’ve collected a long list of the most notable ones.
The way you feel filters the way you interpret the world.
Take, for instance, if the words rake, take, and cake flew across a computer screen blinked on a computer screen for 1/30 of a second.
Which would you recognise?
If you're hungry, research suggests that all you see is cake.
People are overreliant on the first piece of information they hear.
In a salary negotiation, for instance, whoever makes the first offer establishes a range of reasonable possibilities in each person's mind. Any counteroffer will naturally react to or be anchored by that opening offer.
'Most people come with the very strong belief they should never make an opening offer,' says Leigh Thompson, a professor at Northwestern University's Kellogg School of Management. 'Our research and lots of corroborating research shows that's completely backwards. The guy or gal who makes a first offer is better off.'
A cousin of confirmation bias, here our expectations unconsciously influence how we perceive an outcome. Researchers looking for a certain result in an experiment, for example, 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.
Failing to recognise your cognitive biases is a bias in itself.
Notably, Princeton psychologist Emily Pronin has found that 'individuals see the existence and operation of cognitive and motivational biases much more in others than in themselves.'
When you choose something, you tend to feel positive about it, even if the choice has flaws. You think that your dog is awesome -- even if it bites people every once in a while -- and that other dogs are stupid, since they're not yours.
This is the tendency to see patterns in random events. It is central to various gambling fallacies, like the idea that red is more or less likely to turn up on a roulette table after a string of reds.
Where people believe prior evidence more than new evidence or information that has emerged. People were slow to accept the fact that the Earth was round because they maintained their earlier understanding the planet was flat.
This is the tendency of people to conform with other people. It is so powerful that it may lead people to do ridiculous things, as shown by the following experiment by Solomon Asch.
Ask one subject and several fake subjects (who are really working with the experimenter) which of lines B, C, D, and E is the same length as A? If all of the fake subjects say that D is the same length as A, the real subject will agree with this objectively false answer a shocking three-quarters of the time.
'That we have found the tendency to conformity in our society so strong that reasonably intelligent and well-meaning young people are willing to call white black is a matter of concern,' Asch wrote. 'It raises questions about our ways of education and about the values that guide our conduct.'
When people who are more well-informed cannot 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.
A phenomenon in marketing where consumers have a specific change in preference between two choices after being presented with a third choice. Offer two sizes of soda and people may choose the smaller one; but offer a third even larger size, and people may choose what is now the medium option.
When people overestimate the importance of information that is available to them.
For instance, a person might argue that smoking is not unhealthy on the basis that his grandfather lived to 100 and smoked three packs a day, an argument that ignores the possibility that his grandfather was an outlier.
Where people in one state of mind fail to understand people in another state of mind. If you are happy you can't imagine why people would be unhappy. When you are not sexually aroused, you can't understand how you act when you are sexually aroused.
This is where you attribute a person's behaviour to an intrinsic quality of her identity rather than the situation she's in. For instance, you might think your colleague is an angry person, when she is really just upset because she stubbed her toe.
Of course Apple and Google would become the two most important companies in phones -- tell that to Nokia, circa 2003.
When people make irrational decisions based on past rational decisions. It may happen in an auction, when a bidding war spurs two bidders to offer more than they would other be willing to pay.
The tendency to put more emphasis on negative experiences rather than positive ones. People with this bias feel that 'bad is stronger than good' and will perceive threats more than opportunities in a given situation.
Psychologists argue it's an evolutionary adaptation -- it's better to mistake a rock for a bear than a bear for a rock.
The tendency to prefer inaction to action, in ourselves and even in politics.
Psychologist Art Markman gave a great example back in 2010:
The omission bias creeps into our judgment calls on domestic arguments, work mishaps, and even national policy discussions. In March, President Obama pushed Congress to enact sweeping health care reforms. Republicans hope that voters will blame Democrats for any problems that arise after the law is enacted. But since there were problems with health care already, can they really expect that future outcomes will be blamed on Democrats, who passed new laws, rather than Republicans, who opposed them? Yes, they can -- the omission bias is on their side.
People take action in response to extreme situations. Then when the situations become less extreme, they take credit for causing the change, when a more likely explanation is that the situation was reverting to the mean.
This is where your willingness to pay for something doesn't correlate with the scale of the outcome.
From Less Wrong:
Once upon a time, three groups of subjects were asked how much they would pay to save 2,000 / 20,000 / 200,000 migrating birds from drowning in uncovered oil ponds. The groups respectively answered $US80, $US78, and $US88. This is scope insensitivity or scope neglect: the number of birds saved -- the scope of the altruistic action -- had little effect on willingness to pay.
Over-reliance on expert advice. This has to do with the avoidance or responsibility. We call in 'experts' to forecast when typically they have no greater chance of predicting an outcome than the rest of the population. In other words, 'for every seer there's a sucker.'
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.' While there may be some value to stereotyping, people tend to overuse it.
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 who have failed.
It can also cause us to assume that survivors are inordinately better than failures, without regard for the importance of luck or other factors.
We overuse common resources because it's not in any individual's interest to conserve them. This explains the overuse of natural resources, opportunism, and any acts of self-interest over collective interest.
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.
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