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Remove Biases From Your Decision-Making Process

Common cognitive biases

  • The Dunning-Kruger Effect: You believe that you're smarter or more skilled than you are, which prevents you from admitting your limitations and weaknesses.
  • Confirmation Bias: When you welcome information that you agree with while disregarding evidence that doesn't suit you — even if it's accurate.
  • Self-Serving Bias: When you blame external forces when things are bad, but credit yourself when it's good.
  • Optimism Bias: You believe you are more successful than others and won't experience any misfortune.
  • Availability Heuristic: You believe that whatever comes to your mind quickly is the right decision.
  • Attentional Bias: You only focus on some points while ignoring other aspects.
  • False Consensus Effect: When you overestimate how much others will agree with you.
  • Misinformation Effect: Your memory has been interfered with, changing how you recall past events.

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IDEA EXTRACTED FROM:

Remove Biases From Your Decision-Making Process

Remove Biases From Your Decision-Making Process

https://www.entrepreneur.com/article/351497

entrepreneur.com

8

Key Ideas

Know and conquer your enemy

Our brain relies on cognitive biases over clear evidence. Cognitive bias is the tendency to make poor judgments in a consistent pattern. Our unconscious biases are often so strong that they lead us to act in ways that are inconsistent with reason, our values, and beliefs.

Paying careful attention is the best way to beat these biases. It can only be done if you know the different types of cognitive biases that can influence your thinking.

Common cognitive biases

  • The Dunning-Kruger Effect: You believe that you're smarter or more skilled than you are, which prevents you from admitting your limitations and weaknesses.
  • Confirmation Bias: When you welcome information that you agree with while disregarding evidence that doesn't suit you — even if it's accurate.
  • Self-Serving Bias: When you blame external forces when things are bad, but credit yourself when it's good.
  • Optimism Bias: You believe you are more successful than others and won't experience any misfortune.
  • Availability Heuristic: You believe that whatever comes to your mind quickly is the right decision.
  • Attentional Bias: You only focus on some points while ignoring other aspects.
  • False Consensus Effect: When you overestimate how much others will agree with you.
  • Misinformation Effect: Your memory has been interfered with, changing how you recall past events.

Master self-care and self-awareness

Hungry, Angry, Lonely, Tired.

This acronym can be used by anyone to help you master self-care and self-awareness. It encourages you to pause and ask how you're feeling. Feeling hungry, angry, lonely, or tired makes you more vulnerable to self-destructive behaviors.

The SPADE toolkit

Use the SPADE framework, developed by Gokul Rajaram, when you face difficulty in decision making:

  • S is for Setting: Define the “what,” calendar a timeframe, and clarify the “why.”
  • P is for People: Identify the people who should consult (give input), approve, and a single person responsible for the task.
  • A is for Alternative: As the decision-maker, it’s your responsibility to find feasible and diverse alternatives. Gather critical stakeholders and brainstorm possible alternatives.
  • D is for Decide: Here is when you can solicit feedback from others and have them vote on the best course of action. Keep this private by using tools like email. You could also use anonymous polls.
  • E is for Explain: The final step is to explain the decision via a committee meeting.

Consider the opposite

Consider what would happen if you moved in the opposite direction to your choice.

Collect data to support this opposite view and compare it to the data used to support your original decision. Then reevaluate your decision based on the bigger data set.

The valuable vs the worthless

Irrelevant information can influence our decision making.

A study asked participants to pick one of three plans.

  1. $59 a year for an online-only subscription
  2. $125 a year for print only
  3. $125 a year for print and online

16% chose the first option, and the remaining 84% the last option. But when the middle option was removed, 68% chose the cheapest option.

Seek multiple perspectives

One easy and effective way to remove any bias from your decision-making is to ask advice or feedback from others.

People whom you trust will give honest and constructive criticism and point out any blind spots while offering a different point of view.

Reflect on the past

Take some time out and consider similar past scenarios.

  • How did you make that decision?
  • What obstacles did you have?
  • How did you overcome them?
  • What was the outcome?
  • What did you learn?

Reflecting on the answers can help guide you in making a good decision.

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  1. Sunk-cost fallacy. Present yourself with the new options at hand -- without considering the sunk cost.

  2. Narrow framing. When we're in situations that will repeat themselves over time, we should take a step back and play a game of averages.

  3. Emotionally driven decisions. Hold off on making important decisions when you are in a bad mood.

  4.  Confirmation bias. Always look for conflicting evidence and then make judgments based on more well-rounded information.

  5. Ego depletion. When we're drained, physically or mentally, we're less likely to think critically.

  6. The halo effect says that once we like somebody, we're more likely to look for his or her positive characteristics and avoid the negative ones. Realize your biases toward certain people and do what you can to eliminate them.

Decision-making errors

Most decision-making errors boil down to:

  • logical fallacies (over-generalizations, comparing apples and oranges, circular thinking)
  • limiting beliefs (underes...
Confirmation Bias

If you already have an opinion about something before you've even tried to figure it out, chances are you'll over-value information that confirms that opinion.

Think about what kinds of information you would expect to find to support alternative outcomes.

Attribution Bias

The “fundamental attribution error,” is when we excuse our own mistakes but blame other people for theirs.

Give other people the chance to explain themselves before judging their behavior.

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Not Making Good Decisions
We are exposed to biases that influence our ability to make good decisions.
  • We are quick to jump to conclusions because we fail to search for information that might disprove our thoughts.
The Four Villains of Decision Making
  • Narrow framing: The tendency to define our choices in binary terms. We ask, "should I, or shouldn't I?" instead of “What are the ways I could...?”
  • Confirmation bias: People tend to select the information that supports their preexisting attitudes, beliefs, and actions. 
  • Short-term emotion: When we’ve got a difficult decision to make, our feelings occupy our minds. And this doesn't add any new information that could benefit us. 
  • Overconfidence: People often think they know more than they actually do about how the future will unfold.
Defeating Decision-Making Villains
  • Counter narrow framing by widening your options. Expand your set of choices.
  • Confirmation bias leads you to gather self-serving information. Analyze and test your assumptions to overcome the bias.
  • Short-term emotion will tempt you to make the wrong choice. So distance yourself before deciding.
  • Prepare to be wrong. Don't be overconfident about how the future will unfold.
Information that matches our beliefs

We surround ourselves with it: We tend to like people who think like us; if we agree with someone's beliefs, we're more likely to be friends with them.

This makes sense, but it means ...

The "swimmer's body illusion"

It's a thinking mistake and it occurs when we confuse selection factors with results. 

Professional swimmers don't have perfect bodies because they train extensively. Rather, they are good swimmers because of their physiques.

The sunk cost fallacy

It plays on this tendency of ours to emphasize loss over gain.

The term sunk cost refers to any cost that has been paid already and cannot be recovered. The reason we can't ignore the cost, even though it's already been paid, is that we're wired to feel loss far more strongly than gain.

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The ABCDs of categorizing decisions
The ABCDs of categorizing decisions
  • Big-bet decisions: infrequent and high-risk - from major acquisitions to game-changing capital investments;
  • Cross-cutting decisions: frequent and high-risk - think pricin...
Approaching big bet decisions
  • Appoint an executive sponsor to work with a project lead to frame important decisions for senior leaders to weigh in on;
  • Break things down (with decision meetings at each stage), and connect them up.
  • Focuses on debating the solution (instead of endlessly elaborating the problem) and gather the right people.
  • Move faster without losing commitment: get comfortable living with imperfect data and being clear about what “good enough” looks like.
Approaching cross-cutting decisions
  • Identify decisions that involve a cross-cutting group of leaders, and work with the stakeholders of each to agree on what the main steps in the process entail.
  • Work through a set of real-life scenarios to pressure-test the system in collaboration with the people who will be running the process.
  • Limit the number of decision-making bodies, and clarify for each its mandate, standing membership, roles etc.
  • Create shared objectives, metrics, and collaboration targets.

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A checklist for faster, better decisions
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Default options

Deciding is too much effort so we’re likely to just stick with the default or safer option if it’s already been chosen for us. 

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Best decision making happens in the morning

This is when serotonin is at it’s natural high, which helps to calm our brain. Thus, we feel less risk averse and so we can face risks and make harder choices.

The part our bodies play in decision-making

If we’re feeling hunger, thirst or sexual desire, that can actually spill over into the decision areas of our brains, making us feel more desire for big rewards when we make choices. 

This can lead us to make higher-risk choices and to want for more.

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The Art of Decision-making:
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Decision-making cascades 

... through everything you do. That's the power of compounding. If you get 1% better at understanding how the world works, how human behavior works, how economic systems function, and understanding your own brain — that 1% improvement impacts everything you do. 

Study things that never change

The best kind of knowledge is not ephemeral junk , that will be useless in a few years, but the core pillars of human knowledge and the major academic disciplines. That knowledge changes very slowly over time  and it’s a core foundation that you can build upon and grow from. 

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"Good" Decisions

  • Logical decisions tend to trump emotional ones, since emotions can sometimes make us biased or see things in an inaccurate light.
  • Thought-out decisions tend to trump ...

Step away from the problem

Distancing yourself from a problem can help you face it in a more objective way. 

Instead of remaining in your own frame of mind, consider yourself as an outside observer, such as a friend giving advice or a fly on the wall. Removing yourself in this way helps you filter out some of your cognitive biases and lean you toward a more rational decision.

Give yourself some time

Accuracy and reliability in decision making tends to increase if you first give yourself some time to decompress and collect yourself.

This may also help you remove yourself from the problem, knocking out two of these strategies at a time.

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Acknowledge biases

Think critically about your own mentality and what factors could contribute to a subjective decision: How much and how well do you know the other people involved with the decision? What past...

Pro and Con Lists

Take each option in your decision and make two lists for each; on one side, you'll have all the benefits of an option and on the other, you'll have all the downsides. 

Try to give your list a sense of scale. This can help you think through all the positives and negatives of all your options, and help you visualize the generally best candidate.

The outsider's perspective

Imagine your friend telling you the problem using only the most important information, and think about what you might say in return.

Imaging your own advice if you were counseling a friend on making the decision can help you understand what an outsider's perspective might be. 

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