Have you ever wondered how many decisions we make each day? Is it a hundred, thousands, or even more?
According to some studies, a human adult makes 35000 decisions every day from a simple decision to a complex. The number may not be of much importance; what matters is, how to make a better decision. But when it comes to decision making, we are prone to commit cognitive biases that inhibit us from making better and rational decisions in life. In this article, I will share the list of 15 Common Cognitive Biases that impact your thinking.
1. Anchoring Bias
Amos Tversky and Daniel Kahneman were the first to write about Anchoring Bias in a paper in 1974. It is a tendency to rely too much on the first information when making decisions. Whenever we buy a product, we often make our buying decision by comparing it with the first product shown to us. Thus, some smart salespeople offer us the expensive products first, followed by less expensive products; this is why e-commerce websites such as Amazon, eBay, Flipkart, etc., give huge discounts on every product. Next time, try to analyze the information critically before making a buying decision.
2. Availability Bias
The term was first coined in 1973 by Psychologist Amos Tversky and Kahneman. It is a tendency to make decisions based on recent events that come to the mind quickly. As a result, you might think of those events to happen again is more probable than others. For instance, when you have heard about any recent road accident, plane crash, or Shark Attack, etc. When you are about to do the same thing, maybe boarding a flight, driving a vehicle, or swimming at the beach. You will recall the events, and it appears to you that likelihood of that event to happen again become more, which in reality, it’s not. What if this plane crash? As a result, you may cancel the trip.
3. Authority Bias
Stanley Milgram, a psychologist, coined the term Authority Bias in his series of Social Psychology experiments: Milgram Experiments. It is a tendency to believe views to be true, which comes from a person of authority. However, sometimes authorities can be wrong too. We should not consider them blindly. Right from childhood, we follow and respect the elders and higher authority people, such as Doctors, Teachers, politicians, etc. Due to this bias, new ideas often do not come from classes when teachers lecture to students. As students being respected followers, do not challenge their teachers. While some teachers do mention, prove me wrong if you can; this encourages students to think outside the box and better understand the subject.
4. Bandwagon Effect
It is also known as Herd Mentality. The phrase Bandwagon first appeared in American Politics in 1848 when Dan Rice used his Bandwagon, and its music to gain attention for his political campaign. A person tends to subscribe to beliefs or do things that most people are doing. For example, when we buy any online product and a discount, we prefer to look for product reviews; this ensures that the more the people are satisfied with the product, the better the product is so that we do not end up buying the wrong product.
This effect is even more deeply as it affects other aspects of life as well. The best example is the viral act of Harlem Shake back in 2013 and after that, Ice Bucket Challenge and the recent KiKi challenge. Usually, some people are afraid of doing something extraordinary on their own. That’s why they look for things that the majority of the people are doing.
5. Choice Supportive Bias
It is a tendency when a person thinks about a choice made in the past. The person distorts memories to convince that he/she made the right choice. The reason is, we tend to attribute positive features to choices we have made and harmful features to choices we have not made. For example, the decision we made might be wrong, but we tend to think it was the right thing to do. And what I did was right.
6. Confirmation Bias
Peter Wason first described the Confirmation Bias in 1960. It is a tendency when a person confirms the preconceived beliefs and filter out counter-evidence or opinions. For instance, when you want to confirm preconceived ideas, you tend to find the facts and figures that resonate with your beliefs and ignoring the information that contradicts your belief. Also as fake news has been spreading globally, so check the sources before sharing information on social media handles.
7. Framing Effect
Tversky and Kahneman first demonstrated framing effects in 1981. It occurs when people decide based on the way they see the information. Often Marketing people show the critical information in a positive way of the product than negative ways. For example, instead of showing a product contains 20% fat, the company show in the product label it is 80% fat free.
8. Loss Aversion
It is a tendency to avoid a loss than to make it again as “Losses loom larger than gains,” said Tversky. This is why some businesses show limited stock available or put count down timer online; this helps them to increase the sales of products. It is also known as FOMO- Fear of Missing Out.
9. Outcome Bias
It is a tendency to form decisions based on the outcome of the events than the analysis of events that leads to an outcome. In other words, we often decide based on the outcome of the event rather than analyzing the process that caused the effect. The process is an end in itself.
10. Overconfidence Bias
It is a tendency to become overconfident, which often leads to undesirable consequences. Suppose a person buys some shares in the market, out of sheer luck, the shares performed well. Next time, he becomes overconfident that whatever shares he picks, those shares do well in the market. And then shares fell.
11. Ostrich Effect
It is a cognitive bias that causes people to avoid negative things. For example, during a market failure or sudden fall, people tend to avoid financial information and prefer seeing when the market goes up.
12. Halo Effect
Edward L. Thorndike, an American Psychologist, coined the term Halo Effect in 1920. It is a tendency to believe that if a person is good or bad in one trait, then he/she must be equally good or bad in other traits as well. For instance, if someone is a great speaker, then he/she may be as significant in other traits as well.
13. Survivorship Bias
Statistician Abraham Wald first used it during World War 2. It’s a tendency to generalize and believe that if someone becomes successful in rare events, it is possible for others as well. The fact that people like Mark Zuckerberg, Steve Jobs, Bill Gates, Elon Musk, and others who were college dropouts made their companies successful. It does not mean every other can become successful by dropping out of college. People fail to consider that what not to do is equally important for doing something big in any field. Also when it comes to success you need to have long term plans and perseverance to keep going despite difficulties on your way. That’s why it is often said you should focus on delayed gratification than try to become successful over night.
14. Selective Perception
The prominent advertising researcher Seymour Smith coined the term Selective Perception. It is a tendency by which a person only perceives things based on his/her interest and ignore other perspectives. To know more refer this article.
15. Status Quo Bias
Researchers William Samuelson and Richard Zeckhauser introduced the term Status Quo Bias in 1968. It’s a tendency in which a person prefers things to stay the way they are. And people become reluctant to change as most people fear changing themselves. As they think, if they change, they may lose or fail at something. But real growth happens only when you challenge the Status Quo, this is why big companies choose their tagline in such a way that inspires them to keep growing. Life demands investment—those who are willing to pay the price. Life throws ample opportunities to them. By working on it, people change the world forever by making it a better living place.
Conclusion
By now, you must have understood how these 15 Common Cognitive Biases impact our thinking and inhibit us to make good decisions in life. So, try to overcome these biases and see things the way they are, not how you are. This will help you to make great progress in your life by making good decisions.