“A compelling narrative fosters an illusion of inevitability”
If you’re anything like me, you strive to make the best decisions possible. Decisions that minimize losses and maximize gains, in whatever area of life. You work with information available at the time and attempt to execute decisions promptly.
There’s one problem, cognitive biases. These pesky little flaws in our cognition seem to derail our decision-making abilities at times. Perhaps you’ve heard of them or even experienced them interrupting your inner genius. And since we all have them, let’s take a look at some decision hindering biases in hopes your daily decisions are executed both expeditiously and optimally.
1) Availability Bias
As humans, we tend to overestimate the likelihood of something happening based upon what’s readily “available” in our minds. Often, we believe in making a choice based upon what we can recall. The fatal flaw is that what’s “available” isn’t necessarily what’s optimal. Sure it’s easy for us to recall, but in this moment, I urge you to reflect on why you recall the information. Many times frequency clouds our judgement. So as you’re making a decision, think about the information you’re using and perhaps why it came to the surface quickly. By giving it some thought, you’ll likely not bypass healthy alternatives.
2) Bias Blind Spot
When decisions rely on two or more people, you may fall victim to being blinded by the biases you possess. In a study conducted with 600 individuals, 85% believed they were less biased than others. Meaning, we tend to see the lapse in judgment in others as opposed to ourselves. Sound familiar? Have you been known to point to a friend’s fault, but reject their notions of you being identical?
As you make decisions, I’d encourage you to ask yourself briefly, “what am I missing?” Think about how you concluded to a decision and ensure it’s through logic and not irrational thinking. And let me kill the perfect persona in the 85% of individuals, you have lapses in judgement just like everyone else.
3) Choice Supportive Bias
There’s an excellent book called “Fooled by Randomness” where author Nassim Taleb sets forth the notion we overlook randomness in the world at large. He discusses our tendency to overestimate causality and our belief that events are more explainable than they really are. So how does this relate? Well, this bias leads us to ascribe positive attributes to situations where we previously made choices. Primarily, we remember the good – all of it for that matter – and discard the bad, specifically relating to the choices we made.
As you’re facing your decision, if you recall making a similar decision in the past, be careful not only to recall positive attributes from that particular choice. Additionally, be extra cautious of ascribing every positive attribute of that situation to your choice. Or said another way, don’t get fooled by the randomness of events from the past turning out positively from your choices, when your choices could have in no way impacted results.
4) Curse of Knowledge
Are you a subject matter expert? If so, watch out. This particular bias causes extreme difficulties when attempting to view problems from the perspective of lesser-informed individuals. Essentially, individuals can begin believing everyone knows what they know. Therefore, this impacts discussions, training people, communicating information, and more.
When viewing a problem, attempt to see it with a beginner’s mind. Evaluate it from all angles as the expert and novice. Don’t let your knowledge of something cloud your belief in a way that overestimates or even underestimates your decision. Additionally, you could overcomplicate something when simplicity is the best course of action.
5) Hot Hand Fallacy
Now I have to admit, a winning streak in blackjack makes me feel like I’m invincible. It leads me to fall right into this particular bias, as I’m sure it does for many. For the hot hand fallacy, we believe our successes – especially in succession – improve our chances of success in future attempts. And though history can be a great predictor of the future, it’s not the definitive guide.
When making decisions pay close attention to your past successes. Are they causing you to overlook something? Perhaps the circumstances now are slightly different than before. If so, define the differences and try to match your previous decisions to them. If unmatched, seek alternatives to avoid believing you have the “hot hand.”
6) Information Bias
Personally, I think the information bias rears its ugly head as a means to avoid decision-making altogether. Specifically relating to fear for that matter. In this bias, we tend to seek information despite such information having zero effect on our ability to make the decision. Be honest, have you been known to search endlessly for information? Information that wouldn’t make an actual difference in your decision?
So for this bias, it’s important to be attentive to all the reasons you are seeking information. Ask yourself if the information will truly help in your decision making? Or are you avoiding making the decision for another reason? Personally, I’ve “researched” something for hours on end just to reflect and conclude I was hiding behind the research. Simply afraid to decide. Indecision causes endless searching. So don’t let that be you. Get the information required and act.
7) Loss Aversion
Hands down, loss aversion is one of my favorites to study. In my life, I’ve never met a person who didn’t fall victim to this, which fascinates me. Loss aversion is our tendency to strongly avoid losing something. In studies, it’s been proven individuals choose to avoid a loss as opposed to reaping possible gains – absolutely fascinating.
As you’re faced with a decision, think twice about why you’re choosing a particular direction. Are you trying to avoid something? If so, are you bypassing potential gains in your fear of loss? Marketing departments use this all of the time, which coerces our desire to “act now.” So if you’re making a choice, make sure your fear of losing something doesn’t’ drive an irrational decision. Embrace losses in the face of gains any day of the week (for most things at least).
8) Planning Fallacy
Too often we underestimate the time it takes to complete a project. We think idealistically and neglect to give thought to unexpected obstacles.” The planning fallacy leads us to believe things not only can be accomplished, but they will require less time, energy, and effort than necessary. Perhaps you’ve done this before. You promise to complete a home project only to dive head first and realize your time frame has now quadrupled.
When making decisions, especially about projects or things requiring effort and timelines, think about potential obstacles that could happen. Build in such obstacles in the planning phase. Best case, obstacles are nonexistent, and you come out pleasantly surprised. Worst case, or the reality, will be that obstacles will arise, and you’ll need time to work through them.
Have you been prone to a lapse in judgment common to others? If so, I’d love to hear your thoughts below!