Behavioural Bias
How well do you know your cognitive biases?
Thought Systems
Thinking, Fast and Slow uses behavioural economics to explore the dichotomy between two modes of thought that often highlighting the gap between human perception and reality.
- System 1 is quick, intuitive, and emotional with little or no effort and no sense of voluntary control.
- System 2 is deep focused mental activity that demands comprehension of chaotic variables.
Human decision-making is not always rational; whether through decision fatigue or laziness; humans tend to fall into traps of cognitive biases that lead to common errors of judgement.
Support Systems
How can you set up systems to prevent falling victim of lazy thinking?
Study human biases to avoid failing pray to them by recognizing triggers then practising better option taking and engineering systems to avoid the circumstances that lead to weak decisions in the first place.
- Develop mantra as tools for clear thinking in times of chaos, pressure and fatigue.
- Engineer systems that keep you on the happy path by making it impossible to fall into traps of lazy thinking.
Biases
| Bias | Question | Application |
|---|---|---|
| Action Bias | Why do we prefer doing something to doing nothing? | |
| Affect Heuristic | Why do we rely on our current emotions when making quick decisions? | |
| Ambiguity Effect | Why do we prefer options that are known to us? | |
| Anchoring Bias | Why we tend to rely heavily upon the first piece of information we receive? | |
| Attentional Bias | Why do we focus more on some things than others? | |
| Availability Heuristic | Why do we tend to think that things that happened recently are more likely to happen again? | |
| Bandwagon Effect | Why do we support opinions as they become more popular? | |
| Barnum Effect | Why do we believe our horoscopes? | |
| Base Rate Fallacy | Why do we rely on specific information over statistics? | |
| Bikeshedding | Why do we focus on trivial things? | |
| Bottom-Dollar Effect | Why do we transfer negative emotions about being broke on items that we purchase? | |
| Bounded Rationality | Why are we satisfied by "good enough"? | |
| Bundling Bias | Why do we value items purchased in a bundle less than those purchased individually? | |
| Bye-Now Effect | Why are we likely to spend more after reading the word “bye”? | |
| Cashless Effect | Why does paying without physical cash increase the likelihood that we purchase something? | |
| Category Size Bias | Why do we think we're more likely to win at the big casino versus the small one? | |
| Choice Overload | Why do we have a harder time choosing when we have more options? | |
| Cognitive Dissonance | Why is it so hard to change someone's beliefs? | |
| Commitment Bias | Why do people support their past ideas, even when presented with evidence that they're wrong? | |
| Confirmation Bias | Why do we favour our existing beliefs? | |
| Decision Fatigue | Why do we make worse decisions at the end of the day? | |
| Declinism | Why we feel the past is better compared to what the future holds? | |
| Decoy Effect | Why do we feel more strongly about one option after a third one is added? | |
| Disposition Effect | Why do we tend to hold on to losing investments? | |
| Distinction Bias | Why we tend to view two options as more distinctive when evaluating them simultaneously then separately. | |
| Dunning-Kruger Effect | Why can we not perceive our own abilities? | |
| Empathy Gap | Why do we misinterpret how much our emotions influence our behavior? | |
| Endowment Effect | Why do we value items more if they belong to us? | |
| Extrinsic Incentive Bias | Why do we think others are in it for the money, but we're in it for the experience? | |
| Framing Effect | Why do our decisions depend on how options are presented to us? | |
| Functional Fixedness | Why do we have trouble thinking outside the box? | |
| Fundamental Attribution Error | Why do we underestimate the influence of the situation on people's behavior? | |
| Gambler's Fallacy | Why do we think a random event is more or less likely to occur if it happened several times in the past? | |
| Google Effect | Why do we forget information that we just looked up? | |
| Halo Effect | Why do positive impressions produced in one area positively influence our opinions in another area? | |
| Hard-easy Effect | Why is our confidence disproportionate to the difficulty of a task? | |
| Hindsight Bias | Why do we see unpredictable events as predictable after they occur? | |
| Hot-hand Fallacy | Why do we expect previous successful performance to lead to future successful performance? | |
| Hyperbolic Discounting | Why do we value immediate rewards more than long-term rewards? | |
| Identifiable Victim Effect | Why are we more likely to offer help to a specific individual than a vague group? | |
| IKEA effect | Why do we place disproportionately high value on things we helped to create? | |
| Illusion of Control | Why we believe we have more control over the world than we actually do? | |
| Illusion of Validity | Why are we overconfident in our predictions? | |
| Illusory Correlation | Why do we think some things are related when they aren't? | |
| Illusory Truth Effect | Why do we believe misinformation more easily when it's repeated many times? | |
| In-group Bias | Why do we treat our in-group better than we do our out-group? | |
| Incentivization | Why do we work harder when we are promised a reward? | |
| Just-world Hypothesis | Why do we believe that we get what we deserve? | |
| Lag Effect | Why does spacing out the repetition of information make one more likely to remember it? | |
| Law of the Instrument | Why do we use the same skills everywhere? | |
| Less-is-better Effect | Why do our preferences change depending on whether we judge our options together or separately? | |
| Levelling and Sharpening | Why do we exaggerate some details of a story, but minimize others? | |
| Levels of Processing | Why do we remember information that we attach significance to better than information we repeat? | |
| Levels-of-processing Effect | Why repetition improve memory retention | |
| Look-elsewhere Effect | Why do scientists keep looking for a statistically significant result after failing to find one initially? | |
| Loss Aversion | Why do we buy insurance? | |
| Mental Accounting | Why do we think less about some purchases than others? | |
| Mere Exposure Effect | Why do we prefer things that we are familiar with? | |
| Motivating Uncertainty Effect | Why rewards of unknown sizes tend to motivate us more than known rewards | |
| Naive Allocation | Why we tend to prefer spreading limited resources evenly across options | |
| Negativity Bias | Why is the news always so depressing? | |
| Noble Edge Effect | Why do we tend to favour brands that show care for societal issues? | |
| Nostalgia Effect | How do our sentimental feelings for the past influence our actions in the present? | |
| Observer Expectancy Effect | Why do we change our behavior when we're being watched? | |
| Omission Bias | Why don't we pull the trolley lever? | |
| Optimism Bias | Why do we overestimate the probability of success? | |
| Ostrich Effect | Why do we prefer to ignore negative information? | |
| Overjustification Effect | Why do we lose interest in an activity after we are rewarded for it? | |
| Peak-end Rule | How do our memories differ from our experiences? | |
| Pessimism bias | Why do we think we're destined to fail? | |
| Planning Fallacy | Why do we underestimate how long it will take to complete a task? | |
| Primacy Effect | Why do we only remember the first things on our grocery list? | |
| Priming | Why do some ideas prompt other ideas later on without our conscious awareness? | |
| Projection Bias | Why do we think our current preferences will remain the same in the future? | |
| Reactive devaluation | Why is negotiation so difficult? | |
| Regret Aversion | Why do we anticipate regret before we make a decision? | |
| Representativeness Heuristic | Why do we use similarity to gauge statistical probability? | |
| Response Bias | Why responses to a survey or experiment can be inaccurate due to the nature of the survey or experiment | |
| Restraint Bias | Why do we overestimate our self-control? | |
| Rosy Retrospection | Why do we think the good old days were so good? | |
| Salience Bias | Why do we focus on items or information that are more prominent and ignore those that are not? | |
| Self-serving Bias | Why do we blame external factors for our own mistakes? | |
| Serial Position Effect | Why do we better remember items at the beginning or end of a list? | |
| Sexual Overperception Bias | Why do men think that women are always flirting with them? | |
| Social Norms | Why do we follow the behavior of others? | |
| Source Confusion | Why we forget where our memories come from, and thereby lose our ability to distinguish the reality or likelihood of each memory | |
| Spacing Effect | Why do we retain information better when we learn it over a long time period? | |
| Spotlight Effect | Why do we feel like we stand out more than we really do? | |
| Status Quo Bias | Why do we tend to leave things as they are? | |
| Suggestibility | Why is yawning contagious? | |
| Survivorship Bias | Why do we misjudge groups by only looking at specific group members? | |
| Take-the-best Heuristic | Why do we focus on one characteristic to compare when choosing between alternatives? | |
| Telescoping Effect | Why do some things "seem like they just happened yesterday?" | |
| The Illusion of Explanatory Depth | Why do we think we understand the world more than we actually do? | |
| The Pygmalion effect | Why do we perform better when someone has high expectations of us? | |
| The Sunk Cost Fallacy | Why are we likely to continue with an investment even if it would be rational to give it up? | |
| Zero Risk Bias | Why do we seek certainty in risky situations |