In every day of our lives, we are making so many rational decisions. From what time you should wake in the morning down to what ever you will eat throughout the day, also on what path you will take to achieve your goals. In making all of those decisions, there are always cognitive stumbling blocks that will affect your thinking and can greatly affect your decision.
So Cognitive bias is a logical pattern of deviation from the norm or the rationality in judgment. It is a mistake of remembering or another cognitive process that often occurs as a result of holding onto one’s predilection and conviction regardless of inconsistent information.
Here are 5 common biases that can screw up our decision-making.
Anchoring Bias or Focalism is that people are heavily dependent on the first piece of information they hear which becomes the anchor in making decisions. This cognitive bias occurs when an individual uses an initial piece of information to make the following judgment.
For instance, in a salary negotiation, the first to make an offer can set a range of reasonable possibilities on the person’s mind.
Confirmation Bias or the so-called Myside bias is the tendency to search or listen to information which confirms your perceptions. It is a type of cognitive bias and a systematic error of inductive reasoning. This occurs when a person gather or remember information selectively or they interpret it in a biased way.
Smart people believe weird things because they are skilled at defending beliefs they arrived at for non-smart reasons.
This kind of cognitive bias is a psychological phenomenon wherein people uptake beliefs, ideas, fads, and trends increases regardless if it is right or wrong towards their own beliefs. This effect is defined by the possibility of individual ratification increasing with respect to the proportion who have already done so.
In sports, this effect can be seen in the people who supported Golden States despite having no interest in that team before they become champion last 2015 NBA Finals, they can be considered as a “bandwagon fan”.
Survivorship is a form of selection bias. It is a logical error wherein people focus only on things or people that made it past some selection process and overlooking those that did not, usually because of their lack of visibility.
In finance, failed companies are being excluded from the performance studies because of the fact that they no longer exist.
It is a mental shortcut that has tendencies to overestimate the importance of information that is available to them when they are evaluating a specific topic, decisions, or concept.
For instance, you know someone who is an alcoholic but he lived 100 years, this will give an idea that drinking alcoholic drink is not unhealthy.