Cognitive Biases Flashcards
define reciprocity
Responding to a positive action with another positive action, rewarding kind actions.
Reciprocity increases chances of compliance by____
2x
T/F Time is not considered a form of reciprocity
F
T/F Energy depletion does not reduce moral discipline
F
How can you maintain trust throughout an argument or discussion?
Present both sides of the issue
What would indicate that someone is self-conscious about their weight?
Covering or smoothing over the area
Crossed arms, legs or both = ?
Fear, defensiveness
Touching hair =
anxiety
Head/chin pointed down =
hostility
Hand on face (index up cheek) =
critically thinking
Covering mouth =
lying
open palms
trust
Palms down
authority
Crows feet smile =
genuine happiness (real smile)
T/F laughing feels the similar to doing drugs
T
Sitting with elbows resting on armrest = ?
strong, upright
Arms dropped to side when sitting = ?
defeated and/or humble
Raised steeple (when speaking) = ?
confidence, expectation of success
Lowered steeple (when speaking) = ?
confidence, expectation of success
showing thumbs in any way =
sign of superiority and smugness
Hands to head or face
possible lying
Full body fidgeting =
80% probability of lying
aggressive, defensive, blaming language, convincing, etc = ?
very possible lie
How long does it take for lie signals to manifest as a result of a stimulus?
less than 5 seconds
What word can we add to a sentence that significantly increases compliance
because
When should a higher price or more expensive option be presented?
first
Consistency principle
After making a choice or taking a stand, personal and interpersonal pressures force us to behave consistently with it.
T/F Positive comments produce just as much liking for flatterer when they are untrue as when they are true.
T
What are the five elements of social attraction
- Physical Attractiveness
- Similarity
- Flattery
- Positive or negative associations
T/F the strength of a social bond is 10% more likely to produce a product sale then the preference for the product itself.
F 100% more likely
When it comes to following trusting authority figures, what two factors come into play
- Titles
2. Clothing or appearance
What’s a good way to popularize certain information?
Censor it and make the censorship public. People like what they can’t have
define the pluralistic ignorance effect
a situation in which a majority of group members privately reject a norm, but incorrectly assume that most others accept it, and therefore go along with it.
What words and physical movements make your speech more persuasive?
nod your head while you are talking
say “believe me”, “its true”, “obviously”, “clearly”, etc.
Affect Heuristic
A mental shortcut that allows people to make decisions quickly by bringing their emotional response into play. They make decisions according to their gut feeling.
Researchers have found that when people have a pleasant feeling about something, they see the benefits as high and the risks as low, and vice versa
anchoring
A cognitive bias that describes the human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.
For example, an initial price offered for a used car sets the standard for the rest of the negotiation.
loss aversion
refers to people’s tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5.
Availability heuristic
A mental shortcut that relies on immediate examples that come to a given person’s mind when evaluating a specific topic, concept, method or decision.
People tend to heavily weigh their judgments toward more recent information, making new opinions biased toward the latest news.
which job is more dangerous – being a police officer or a logger? While high-profile police shootings might lead you to think that cops have a more dangerous job, statistics actually show that loggers are more likely to die on the job than cops. This is an example of
Availability heuristic
Bounded rationality
The idea that in decision-making, people are limited by the information they have, the cognitive limitations of their minds, and the finite time. As a result, they seek for a “good enough” decision and tend to make a satisficing (rather than maximizing or optimizing) choice.
during shopping when people buy something that they find acceptable, although that may not necessarily be their optimal choice. This is an example of
bounded rationality
certainty effect
When people overweight outcomes that are considered certain relative to outcomes that are merely possible.
The certainty effect makes people prefer 100% as a reference point relative to other percentages, even though 100% may be an illusion of certainty. Lower percentages or probabilities can be more beneficial in the long run.
people prefer a 100% discount on a cup of coffee every 10 days to other more frequent but lower discount offer, even though the second option may save them more money in the long run. is an example of
certainty effect
choice overload
A cognitive process in which people have a difficult time making a decision when faced with many options.
Too many choices might cause people to delay making decisions or avoid making them altogether.
For example, a famous study found that consumers were 10 times more likely to purchase jam on display when the number of jams available was reduced from 24 to 6.
Less choice, more sales. More choice, fewer sales.
this is an example of
choice overload
cognitive dissonance
A mental discomfort that occurs when people’s beliefs do not match up with their behaviors.
when people smoke (behavior) and they know that smoking causes cancer (cognition). this is an example of
cognitive dissonance
principle of committment
The tendency to be consistent with what we have already done or said we will do in the past, particularly if this is public.
researchers asked people if they would volunteer to help with the American Cancel Society. Of those who received a cold call, 4% agreed. A second group was called a few days prior and asked if they would hypothetically volunteer. When the actual request came later, 31% of them agreed. this is an example of what
committment
Confirmation bias
The tendency to search for or interpret information in the way that confirms one’s preexisting beliefs, leading to statistical errors.
When people would like a certain idea to be true, they end up believing it to be true. They are motivated by wishful thinking.
a person with a low self-esteem is highly sensitive to being ignored by other people, and they constantly monitor for signs that people might not like them.
confirmation bias
decision fatigue
A lower quality of decisions made after a long session of decision making.
Repetitive decision-making tasks drain people’s mental resources, therefore they tend to take the easiest choice – keeping the status quo.
researchers studied parole decisions made by experienced judges and revealed that the chances of a prisoner being granted parole depended on the time of the day that judges heard the case.
65% of cases were granted parole in the morning and fell dramatically (sometimes to zero) within each decision session over the next few hours. The rate returned back to 65% after a lunch break and fell again. this is an example of
decision fatigue
dunning-kruger effect
A cognitive bias in which people who are ignorant or unskilled in a given domain tend to believe they are much more competent than they are.
In simple words, “people who are too stupid to know how stupid they are”.
a nationwide survey found that 21% of Americans believe that it’s ‘very likely’ that they’ll become millionaires within the next 10 years. this is an example of
dunning-kruger effect
present bias
The tendency of people to want things now rather than later, as the desired result in the future is perceived as less valuable than one in the present.
a research found that a $68 payment right now is just as attractive as a $100 payment in 12 months. this is an example of
present bias
diversification bias
People seek more variety when they choose multiple items for future consumption than when they make choices sequentially on an ‘in the moment’ basis.
before people are going on vacation, they add classical, rock and pop music to their playlist but eventually end up listening to their favorite rock music.
diversification bias
willpower depletion
people have a limited supply of willpower, and it decreases with overuse. Willpower draws down mental energy – it’s a muscle that can be exercised to exhaustion.
research showed that people who initially resisted the temptation of chocolates were subsequently less able to persist on a difficult and frustrating puzzle task. Additionally, when people gave a speech that included beliefs contrary to their own, they were also less able to persist on the difficult puzzle.
willpower depletion
elimination by aspects
A decision-making technique. When people face with multiple options, they first identify a single feature that is most important to them. When an item fails to meet the criteria they have established, they cross the item off their list of options. Different features are applied until a single ‘best’ option is left.
a consumer may first compare cars on the basis of safety, then gas mileage, price, style, etc, until only one option remains.
elimination by aspects
hot-cold empathy gap
We have trouble imagining how we would feel in other people’s shoes.
We are also not good at imaging how other people would respond to things because we assume they would respond in the same way we would.
people post videos of their kids or bragging about their latest business success on Facebook assuming that their friends would appreciate it and be happy for them. Unfortunately, this often provokes negative feelings and makes their facebook friends resentful, angry or sad.
hot-cold empathy gap
endowment effect
Once people own something (or have a feeling of ownership) they irrationally overvalue it, regarding of its objective value.
People feel the pain of loss twice as strongly as they feel pleasure at an equal gain, and they fall in love with what they already have and prepare to pay more to retain it.
scientists randomly divided participants into buyers and sellers and gave the sellers coffee mugs as gifts. Then they asked the sellers for how much they would sell the mug and asked the buyers for how much they would buy it.
Results showed that the sellers placed a significantly higher value on the mugs than the buyers did.
endowment effect
Fear of Missing out FOMO
An anxious feeling that can happen when you fear that other people might be having rewarding experiences that you’re missing.
Many people have been preoccupied with the idea that someone, somewhere, is having a better time, making more money, and leading a more exciting life.
Framing effect
A cognitive bias, in which people react to a particular choice in different ways depending on how it is presented, as a loss or as a gain.
People tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented
eople are more likely to enjoy meat labeled 75% lean meat as opposed to 25% fat, or use condoms advertised as being 95% effective as opposed to having a 5% risk of failure.
framing effect
gamblers fallacy
The mistaken belief that, if something happens more frequently than normal during a certain period, it will happen less frequently in the future, or that, if something happens less frequently than normal during a certain period, it will happen more frequently in the future.
f you are playing roulette and the last four spins of the wheel have led to the ball’s landing on black, you may think that the next ball is more likely than otherwise to land on red.
gambler’s fallacy
T/F it takes 21 days to start a new habit
F it takes 66 days
halo effect
A cognitive bias in which our overall impression of a person influences how we feel and think about his or her character.
We assume that because people are good at doing A, they will be good at doing B and C too.
Your overall impression of a person (“She is nice!”) impacts your evaluation of that person’s specific traits (“She is also smart!”).
eople tend to rate attractive individuals more favorably for their personality traits or characteristics than those who are less attractive. this is an example of
halo effect
Hedonic adaptation
People quickly return to their original level of happiness, despite major positive or negative events or life changes.
When good things happen, we feel positive emotions but they don’t usually last. The excitement of purchasing a new car or getting a promotion at work is temporary.
One study showed that despite initial euphoria, lottery winners were no happier than non-winners eighteen months later.
hedonic adaptation
herd behavior
The tendency for individuals to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice
n the late 1990s investors were investing huge amounts of money into Internet-related companies, even though most of them did not have structured business models. Their driving force was the reassurance they got from seeing so many others do the same.
herd behavior
hindsight bias
The tendency of people to overestimate their ability to have predicted an outcome that could not possibly have been predicted.
A psychological phenomenon is which people believe that an event was more predictable than it actually was, and can result in an oversimplification in cause and effect.
after the great recession of 2007, many analysts explained that all the signs of the financial bubble were there. If the signs had been that obvious, how come almost no one saw it coming in real time?
hindsight bias
IKEA effect
A cognitive bias in which people place a disproportionately high value on products they partially created.
participants who built a simple storage box themselves were willing to pay much more for the box than a group of participants who merely inspected a fully built box.
IKEA effect
Less is better effect
When low-value options are valued more highly than high-value options.
This effect occurs only when the options are evaluated separately. This way the evaluations of objects are influenced by attributes which are easy to evaluate rather those which are important.
A person giving an expensive $45 scarf as a gift was perceived to be more generous than one giving a $55 cheap coat.
An overfilled ice cream serving in a small cup with 7 oz of ice cream was valued more than an underfilled serving in a large cup with 8 oz of ice cream.
examples of
less is better effect
licensing effect
When people allow themselves to indulge after doing something positive first.
Drinking a diet coke with a cheeseburger can lead one to subconsciously discount the negative attributes of the meal’s high caloric and cholesterol content.
Going to the gym can lead us to ride the elevator to the second floor.
licensing effect
Loss is _____ more powerful than gaining
2x
optimism bias
A cognitive bias that causes people to believe that they are at a lesser risk of experiencing a negative event compared to others.
When it comes to predicting what will happen to us tomorrow, next week, or fifty years from now, we overestimate the likelihood of positive events.
, smokers tend to feel they are less likely than other individuals who smoke to be afflicted with lung cancer. Similarity, motorists tend to feel they are less likely to be involved in a car accident than is the average driver.
optimism bias
overconfidence effect
We systematically overestimate our knowledge and our ability to predict.
Overconfidence measures the difference between what people really know and what they think they know.
It turns out the experts suffer even more from the overconfidence effect than laypeople do.
Studies have found that over 90% of US drivers rate themselves above average, 68% of professors consider themselves in the top 25 percent for teaching ability, and 84% of Frenchmen believe they are above-average lovers.
overconfidence effect
over justification effect
he loss of motivation and interest as a result of receiving an excessive external reward (such as money and prizes).
When being rewarded for doing something actually diminishes intrinsic motivation to perform that action.
researchers gave children reward for doing activities they already enjoyed, like solving puzzles. Then, the children were given an opportunity to engage in these same activities on their own, when no rewards would be forthcoming. The results: children engaged in these activities less often than they did before.
over justification effect
pain of paying
Some purchases are more painful than others, and people try to avoid those types of purchases. Even if the actual cost is the same, there is a difference in the pain of paying depending of the mode of payment.
Purchases are not just affected by the price, utility and opportunity cost, but by the pain of paying attached to the transactions.
Studies show that people feel the pain of paying the most when they:
Paying in cash (as opposed to credit card).
Paying a separate fee/commission (as opposed to fee included in the total purchase price).
Paying as they consume (as opposed to one-time payment).
Paying frequently (as opposed to prepaid).
Paying on their own (as opposed to receiving a gift from their partners).
pain of paying
partitioning
When the rate of consumption decreased by physically partitioning resources into smaller units.
For example, cookies wrapped individually, a household budget divided into categories (e.g. rent, food, utilities, transportation etc.).
When a resource is divided into smaller units, consumers encounter additional decision points – a psychological hurdle encouraging them to stop and think.
partitioning
Peak end rule
People judge an experience largely based on how they felt at its peak (the most intense point) and its end, rather than on the total sum or average of every moment of the experience.
The effect occurs regardless of whether the experience is pleasant or unpleasant and how long the experience lasted.
study showed that in uncomfortable colonoscopy procedures, patients evaluated the discomfort of the experience based on the pain at the worst peak and the final ending moments. This occurred regardless of the procedure length or the pain intensity.
peak end rule
priming
When people are exposed to one stimulus, it affects how they respond to another stimulus.
Their unconscious brain is affected by stimulus like colors, words or smells, which created an emotion that will affect their next actions.
, one study revealed that when restaurants played French music, diners ordered more wine.
In a different study, when websites’ visitors were exposed to a green background with pennies on it, they looked at the price information longer than other visitors.
priming
procrastination
The avoidance of doing a task that needs to be accomplished.
It is the practice of doing more pleasurable things in place of less pleasurable ones or carrying out less urgent tasks instead of more urgent ones
projection bias
The tendency of people to overestimate the degree to which other people agree with them. People tend to assume that others think, feel, believe, and behave much like they do.
This bias also influences people’s assumptions of their future selves. They tend to believe that they will think, feel, and act the same in the future as they do now.
For this reason, we sometimes make decisions that satisfy current desires, instead of pursuing things that will serve our long-term goals
The tendency of people to overestimate the degree to which other people agree with them. People tend to assume that others think, feel, believe, and behave much like they do.
This bias also influences people’s assumptions of their future selves. They tend to believe that they will think, feel, and act the same in the future as they do now.
For this reason, we sometimes make decisions that satisfy current desires, instead of pursuing things that will serve our long-term goals
projection bias
f people go to the supermarket when they are hungry – they tend to buy things they don’t normally eat and spend more money as a result. This happens because at the time of shopping they unconsciously anticipate that their future hunger will be great as it is now.
projection bias
ratio bias
People’s difficulties in dealing with proportions or ratios as opposed to absolute numbers.
participants rated the statement “36,500 people die from cancer every year” as riskier than the statement “100 people die from cancer every day”.
ratio bias
People’s difficulties in dealing with proportions or ratios as opposed to absolute numbers.
ratio bias
11% of people were willing to donate an amount worth one day’s salary when they were given a small gift of candy while being asked for a donation, compared to 5% of those that were just asked for the donation.
reciprocity
regret aversion
People anticipate regret if they made a wrong choice, and take this anticipation into consideration when making new decisions. Fear of regret can play a large role in dissuading or motivating someone to do something.
People anticipate regret if they made a wrong choice, and take this anticipation into consideration when making new decisions. Fear of regret can play a large role in dissuading or motivating someone to do something.
regret aversion
an investor decides to buy a stock based on a friend’s recommendation. After a while, the stock falls by 50% and the investor sells the stock at lost.
To avoid this regret in the future, the investor will research any stocks that his friend recommends.
On the other hand, if the investor didn’t take his friend recommendation and the price increased by 50%, next time the investor would be less risk averse and would buy any stocks his friend recommends.
regret aversion
representativeness heuristic
People tend to judge the probability of an event by finding a ‘comparable known’ event and assuming that the probabilities will be similar.
When people rely on representativeness to make judgments, they are likely to judge wrongly because the fact that something is more representative does not actually make it more likely.
People tend to judge the probability of an event by finding a ‘comparable known’ event and assuming that the probabilities will be similar.
When people rely on ______ to make judgments, they are likely to judge wrongly because the fact that something is more representative does not actually make it more likely.
representativeness heuristic
if a customer meets a salesman from a certain company that is aggressive, the customer might assume that the company has an aggressive culture.
representativeness heuristic
scarcity
The more difficult it is to acquire an item the more value that item has.
When there is only a limited number of items available. The rarer the opportunity, the more valuable it is.
People assume that things that are difficult to obtain are usually better than those that are easily available. They link availability to quality.
On “Black Friday”, more than getting a bargain on a hot item, shoppers thrive on the competition itself, in obtaining the scarce product.
scarcity
social proof
A psychological phenomenon where people reference the behavior of others to guide their own behavior.
A psychological phenomenon where people reference the behavior of others to guide their own behavior
social proof
Studies show that over 70% of Americans say they look at product reviews before making a purchase and 83% of consumers say they trust recommendations over any other form of advertising.
social proof
wisdom of friends
an approval from friends and people you know.
92% of consumers trust recommendations from people they know and pay 2X more attention to recommendations from friends.
an approval from friends and people you know.
92% of consumers trust recommendations from people they know and pay 2X more attention to recommendations from friends.
wisdom of friends
sunk cost fallacy
The tendency of people to irrationally follow through on an activity that is not meeting their expectations because of the time and/or money they have already spent on it.
he tendency of people to irrationally follow through on an activity that is not meeting their expectations because of the time and/or money they have already spent on it.
sunk cost fallacy
explains why people finish movies they aren’t enjoying, finish meals in restaurants even though they are full, hold on to investments that are underperforming and keep clothes in their closet that they’ve never worn.
sunk cost fallacy
zero price effect
When any item priced at exactly zero will not only be perceived to have a lower cost but will also be attributed greater perceived value.
When people are offered something for free, they have an extremely positive reaction that clouds their judgment.
