Anchoring

We have a tendency to stubbornly hold on to a number once we hear it and gauge all other numbers based on the initial number, even if the information is not that relevant.

For example, if customers are limited to 'four per customer' they are more likely to buy four, even if they did not initially intend to do so.

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Problem Solving

inc.com

MORE IDEAS FROM THE ARTICLE

Our brains like shortcuts and ideas that are consistent. 

When someone makes a good first impression during an interview, their professional accomplishments are more likely to be viewed as similarly positive later.

We are more likely to listen to success stories than failures. The result is that we often over-estimate the likelihood of success in risky ventures.

The idea is once we are invested in something, we become less likely to abandon it, even if it is clear that it will ultimately fail.

We frequently lose more if we don't make the hard decision to cut our losses.

People don't like to rethink their beliefs once they are formed. 

We would rather ignore information that would challenge our ideas than engage with threatening new information. This is called "confirmation bias".

Our brain likes to take shortcuts to solve a problem when normal methods are too slow to find a solution. 

The problem with this approach is that frightening events are easier to recall than every-day events. We should be aware that alarmist news broadcasts don't help in an accurate sense of events.

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RELATED IDEAS

Most decision-making errors boil down to:

  • logical fallacies (over-generalizations, comparing apples and oranges, circular thinking)
  • limiting beliefs (underestimations of what's possible)
  • judgment biases (valuing certain factors above others).

Each day, we automatically make thousands of choices, from what time to wake up to what to eat.

The problem with this automatic processing is that there are instances when we jump to conclusions that are wrong. 

<b>Survivorship bias</b> refer...
Survivorship bias refers to our tendency to focus on the winners while completely forgetting about the losers who are employing the same strategy.


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