It is a field of study bringing together knowledge from psychology and economics to reveal how real people behave in the real world.
MORE IDEAS FROM The Availability Bias: How to Overcome a Common Cognitive Distortion
We tend to judge the likelihood and significance of things based on how easily they come to mind. The more “available” a piece of information is to us, the more important it seems.
The result is that we give greater weight to information we learned recently because a news article you read last night comes to mind easier than a science class you took years ago. We also give greater weight to information that is shocking or unusual. Shark attacks and plane crashes strike us more than accidental drowning or car accidents, so we overestimate their odds.
“The attention which we lend to an experience is proportional to its vivid or interesting character, and it is a notorious fact that what interests us most vividly at the time is, other things equal, what we remember best.”
There is no real link between how memorable something is and how likely it is to happen. In fact, the opposite is often true. Unusual events stand out more and receive more attention than commonplace ones. As a result, the availability heuristic skews our perception of risks in two key ways:
We overestimate the likelihood of unlikely events. And we underestimate the likelihood of likely events.
There’s a reason why cultures around the world teach important life lessons and values through fables, fairy tales, myths, proverbs, and stories.
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.
Managers who can expand their imaginations to see a wider range of possible futures will be much better positioned to take advantage of the unexpected opportunities that appear.
By identifying basic trends and uncertainties, a manager can construct a series of scenarios that will help to compensate for decision-making errors from overconfidence and tunnel vision. That’s what scenario planning does.
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 that we subconsciously begin to ignore or dismiss anything that threatens our world views
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