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Cognitive Biases are a collection of faulty and illogical ways of thinking which are hardwired in the brain, most of which we aren’t aware of.
The idea of cognitive biases was invented in the 1970s by two social scientists Amos Tversky and Daniel Kahneman, with Kahneman winning the 2002 Nobel Prize in Economics for the same.
It's a tendency to heavily weigh the moment which is closer to the present, as compared to something in the near or distant future.
Example: If you are offered a choice of $150 right now or $180 after 30 days, you would be more inclined to choose the money you are offered right now. However, if we take the present moment out of the equation, and put this offer in the distant future, where you are offered $150 in 12 months or $180 in 13 months, your choice is likely to be the latter one.
It's our tendency to place importance on the first figure that we hear or see and tends to greatly affect our decisions, estimates or predictions.
Negotiators use this tactic and start with an extremely high or low number, anchoring the subsequent deal in their favour.
This is one of the most common and dangerous ones, and is related to our beliefs. It leads us to ‘confirm’ what we already know, believe or suspect when any new piece of data comes in the light. If there is an alternate or conflicting piece of evidence, we tend to sideline, ignore or discount it. If it is too powerful to be ignored, it makes us experience cognitive dissonance.
People unconsciously seek to confirm their existing beliefs. To expand one's mind or prove any hypothesis, one should be looking for pieces of evidence that disprove it.
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...are common thinking errors that harm our rational decision-making.
We don't always see things as they are. We don't simply glean information through the senses and act on it; inste...
Is our tendency to overestimate the odds of our own success compared to other people's.
Overly optimistic predictions can be dangerous, leading us to waste time and resources pursuing unrealistic goals. In the real world of business, things don't always work out for the best, and it serves us well to know when conditions are not on our side.
... specifically cognitive biases, are your unchecked tendencies to make decisions or take actions in an irrational way.
Instead of making decisions based on facts and data, you ...
The brain creates shortcuts in order to make fast decisions when it hits information or inspiration overload.
These shortcuts form unconscious biases so it’s easier for your brain to categorize information and make quick judgments over and over again.
This means that when something good happens, you take the credit, but when something bad happens, you blame it on external factors.
Self-serving bias may manifest at work when you receive critical feedback. Instead of keeping an open mind, you may put up a defense when your manager or team member is sharing feedback or constructive criticism.
Economists used to believe that people will always choose the option that maximizes their well-being. But people act against their rational self-interest all the time.
This bias addresses why we do unimportant tasks we think are time-sensitive over tasks that are not time-sensitive, even if the non-time-sensitive tasks provide greater rewards.
How to overcome this bias:
This effect describes our tendency to remember incomplete or interrupted tasks better than completed tasks. Each unfinished task takes up some of your attention, splitting your focus. It also interferes with your sleep.
What you can do about it: