25 Cognitive Biases Flashcards
Anchoring Effect
AKA relativity trap
Tendency we have to compare and contrast only a limited set of items
Called anchoring effect because we tend to fixate on a value or number that in turn gets compared to everything else
Confirmation Bias
Most people are biased toward confirming their existing beliefs
Having a tendency to test ideas in a one sided way by searching for evidence consistent with their current hypothesis and ignoring alternatives
Projection Bias
Tend to assume most people think just like us, though there may be no justification for it
Tendency to unconciously assume that others share one’s current emotional states
Thoughts and values often leads to a related effect known as false consensus bias where we tend to believe that people not only think like us, but agree with us
Hyperbolic Discounting
Tendency for people to want an immediate payoff rather than a larger gain later on
Most people would rather take $5 now than $7 in a week
Fundamental attribution error (aka correspondence bias)
AKA correspondence bias
Default assumption that what a person does is based more on what “kind” of person he or she is, rather than social and environmental forces at work on that person
Often leads to erroneus explanations for behavior
Curse of Knowledge
When better-informed people find it extremely difficult to think about problems from the perspective of lesser-informed people
Hindsight Bias
“I knew it all along” effect
Tendency to see past events as being predictable at the time those events happened
Identifiable Victim Effect
Tendency to respond more strongly to a single identified person at risk than to a large group of people at risk
Sunk Cost Fallacy
AKA Irrational Escalation
Phenomenon where people justify increased investment in a decision, based on the cumulative prior investment
Loss Aversion
The disutility of giving up an object is greater than the utility associated with acquiring it
Amateur investors will often hold on to a bad investment instead of selling them at a loss and putting the money toward a better investment
Outcome bias
Tendency to judge a decision by its eventual outcome instead of based on the quality of the decision at the time it was made
Risky investments that pay off are cited as “genius” instead
Overconfidence effect
Excessive confidence in one’s own answers to questions
For certain types of questions, answers that people rate as “99 certain” turn out to be wrong 40% of the time
Risk compensation
AKA Peltzman effect
Tendency to take greater risks when perceived safety increases
Vehicle becomes safer (air bags, seat belts etc.) drivers take more risks to compensate
Halo Effect
Tendency for a person’s positive or negative traits to “spill over” from one personality to another in others’ perceptions of them
You view negative actions of people you like in a much kinder light than people you dislike
Illusion of Asymmetric Insight
People perceive their knowledge of their peers to surpass their peer’s knowledge of them
In arguments with another person it’s common to tell them what they are like in great detail because clearly they have very little self-knowledge. They argue back telling you things about yourself that are clearly wrong or that you knew anyway
Self-serving bias
Tendency to claim more responsibility for successes than failures
It may also manifest itself as a tendency for people to evaluate ambiguous information in a way beneficial to their interests
Student attributes earning a good grade on an exam to their own intelligence and preparation but attributes earning a poor grade to the teacher’s poor teaching ability or unfair test questions is exhibiting the self-serving bias
Illusion of truth effect
People are more likely to identify as true statements those they have previously heard (even if they cannot consciously remember having heard them), regardless of the actual validity of the statement
In other words, a person more likely to believe a familiar statement than an unfamiliar one
Example
We see advertising for the same products over and over again
Spotlight effect
Tendency to overestimate the amount that other people notice your appearance or behavior
Survivorship Bias
The logical error of concentrating on the people or things that survived some process and inadvertently overlooking those that did not because of their lack of visibility
This bias manifests itself in people who systematically overestimate their chances of success
Example
Companies that no longer exist are sometimes excluded from analyses of financial performance
Availability Bias
When someone overestimates the importance of information that is available to them
Example
A person who argues that smoking is not unhealthy on the basis that his grandfather lived to 100 and smoked 3 packs a day, ignores the possibility that his grandfather was an outlier
The Swimmer’s Body Illusion
Professional swimmers don’t have perfect bodies because they train extensively. Rather, they are good swimmers because of their physiques. How their bodies are designed is factor for selection and not the result of their activities.
Whenever we confuse selection factors with results, we fall prey to the swimmer’s body illusion. Without this illusion, half of advertising campaigns would not work.
Example
Harvard has the reputation of being a top university. Many highly successful people have studied there. Does this mean that Harvard is a good school? We don’t know. Perhaps the school is mediocre, and it simply recruits the brightest students around.
Negativity Bias
People tend to pay more attention to bad news
Often we perceive negative news as being more important or profound
We also tend to give more credibility to bad news, perhaps because we’re suspicious (or bored) of proclamations to the contrary
Example
Steven PInker argues that crime, violence, war, and other injustices are steadily decline, yet most people would argue that things are getting worse
Bias Blind Spot
Tendency to see oneself as less biased than other people, or to be able to identify more cognitive biases in others than in oneself
Some people believe their peers have significantly more bias than themselves
Fundamental attribution error
AKA correspondence bias
Default assumption that what a person does is based more on what “kind” of person he or she is, rather than the social and environmental forces at work on that person
Often leading to erroneous explanations for behavior
Example
You say hello to someone, and they just give you a quick unfriendly “hello” and then walk away. It would be a fundamental attribution error to think this person is unfriendly by nature. Perhaps the person is having the worst day of their life, or just found out a loved one died, or failed a test and was feeling devastated, etc.
Dunning-Kruger Effect
The situation in which incompetent people fail to realize they are incompetent because they lack the skill to distinguish between competence and incompetence
Actual competence may weaken self-confidence, as competent individuals may falsely assume that others have an equivalent understanding
Example
Immediately after a test, subjects who perform poorly are susceptible to the Dunning-Kruger effect will often believe they have done well
Framing Effect
Drawing different conclusions from the same information, depending on how or by whom that information is presented
Example
Many more people will register early for a conference when a penalty fee for late registration is emphasized, compared to when discount for early registration is emphasized
Most people will support an economic policy if the employment rate is emphasized than when the associated unemployment rates is highlighted
