The Gambler Fallacy - Deepstash

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The Cognitive Biases Tricking Your Brain

The Gambler Fallacy

It makes us certain without a doubt that if the flipped coin lands a heads up five times consecutively, it will land as tails up the sixth time. The real odds still stand at 50-50 for each flip.

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Cognitive biases
Cognitive biases

...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; instead, our minds give that info their own spin, which can sometimes be deceptive.

Optimism Bias

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.

How to control the optimism bias
  • Be skeptical of your own rosy expectations for your work. 
  • Assume projects will be more difficult and more expensive than you initially think they will. 
  • Don't trust your good ideas to manifest through positive thinking - be ready to fight for them.
  • Trust the numbers. Numbers are firm but fair, and getting intimate with your business's cash flow can help you make more rational decisions.
Biases...
Biases...

... 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 are more prone to base your decisions on unconscious errors that lead to a distorted judgment of the world. These biases ultimately affect your relationships, work, and worldview.

Biases = shortcuts for processing information

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.

Self-serving Bias
It causes you to claim your successes and ignore your failures. 

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.

The power of charisma
Charismatics can make us feel charmed and great about ourselves. They can inspire us to excel. They hypnotize us.

But they can also be dangerous. They can use charisma for their own purposes, to enhance their power, to manipulate others.

Defining charisma

The German sociologist from the early 20th-century Max Weber wrote charisma is a quality that sets an individual “apart from ordinary men,” and causes others to treat him as “endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities.”

Charismatic techniques can be taught

Charismatic Leadership Tactics range from the use of metaphors and storytelling to nonverbal methods of communication like open posture and animated, representative gestures at key moments.

The more charismatic leadership tactics used, the more individuals will be seen as leader-like by others.