The Most Common Cognitive Biases Influencing Your Decisions
We may think of ourselves as smart, rational, educated folks – but we all face biases when making decisions that make most of them less than rational, called cognitive biases. As humans, we have an inherent inability to interpret events objectively and a tendency to make decisions based on limited information, our own self-interest, an overconfidence in our knowledge and an attachment to past events. According to Jim Taylor, PhD and professor at the University of San Francisco, these biases can be grouped into 2 broad categories:
- Information biases – these tend to use some type of information-processing shortcut that produces fast but inaccurate decisions, they usually involve not paying attention or thinking through all relevant and available information.
- Ego biases – these are personal and emotional motivations, like fear or worry, and social influences like peer pressure, and doubt that other people can be wrong.
While there are many biases documented and studied by Cognitive Psychologists, some of the most common, and potentially debilitating biases include:
A confirmation bias is the tendency to seek out only information that confirms pre-existing beliefs or preconceptions and to disregard or ignore information that may disagree with it. According to a study at the University of Texas at Austin, researchers studied online stock market investors and how they filtered information about a potential stock. Researchers found that confirmation bias was rampant, and investors mostly look for information that confirmed their original assumption or hunch about a particular stock. Those that showed the strongest confirmation bias also made the least amount of money.
The negativity bias refers to the human tendency to favor the negative, meaning when events are of equal intensity, things of a more negative nature (unpleasant thoughts, emotions, or social interactions) have a greater effect on a person’s psychological state than positive things. This can be evidenced most obviously in the media’s focus on negative news. Psychologists point out that there is an evolutionary component to this tendency, as hominids living millions of years ago saw many life-saving benefits from tuning into dangerous “negative” scenarios potentially impacting their survival. But, this may not serve humanity in the same regard in modern society. According to Professor of Psychology at Harvard University Steven Pinker, statistics show that crime, violence, war, and other social injustices are steadily declining in society, yet most people would argue that things are getting worse – specifically due to the negativity bias present in today’s media and our retention of the negative vs. positive news reported.
The Framing Effect
This bias involves reacting to information in different ways depending on how it is presented. This human tendency is often exploited by advertisers in marketing campaigns. For example, attendees of an event will register early 30% more often when the framing (wording) in the marketing material was in terms of a penalty fee for late registration, than a discount for earlier registration – even when the total fee was the same. Several studies have examined this, PsychCentral reported one study in which beef described as “75% lean” was given higher ratings than beef described as “25% fat” and another where business teams were allocated more funds when their performance rates are framed in terms of successes rather than failures.
These and many other inherent biases in human cognition affect our decision making every day. To read more visit www.psychcentral.com.