Biases that give us a distorted interpretation of facts

1. 20 Cognitive
Biases That Affect
Our Decisions
Jennifer M Wood
September 17, 2015
Transferred by A Haller

2. Anchoring Bias
• A bias that occurs as judgment
based on first information heard
• Speak first with an asking price. It
anchors the negotiation whether
the price reflects reality or not
Availability Heuristics
• People overestimate the
information given them (too
small or too large a data set)
• Smoking is not an important
concern as I know someone who
lived to 100 who was a smoker
• Prosecutor’s Fallacy – get me the
data on enough people and I will
find 6 who could have done the
crime. Who cares who gets
blamed?

3. Bandwagon Effect
• A powerful form of group think. So
easy to go along to get along with
the beliefs that the group cherishes
Blind-spot Bias
• Failure to spot one’s blind spot.
Example remove the speck from
one’s eye but first remove the log
from one’s own eye.

4. Choice-supportive bias
• A bias one finds livable but has
problematic flaws.
• Pet bites visitors.
• I love my pet.
Clustering Illusion
• See patterns in otherwise
considered random events. Playing
cards one sees red card appear
frequently. It is due to randomness
not design.
• Also known as gamblers fallacy

5. Confirmation Bias
• A bias based on chosing
information that suits one’s
assumptions. Disregard
contrary information that
could refute.
• Cavanaugh hearing
Conservatism Bias
• Slowness to adjust to new
data that reverses an old
misperception
• Example Europe slow to accept
Galileo

6. Information Bias
• Seek information when it does not
affect action. More information not
always better
• With less information people can make
more accurate projections.
Ostrich Effect
Ignore dangerous or negative information

7. Outcome Bias
• Just because you won at the gambling table does
not mean gambling was a wise a decision. More
than likely you should have lost.
Overconfidence
• Too confident in our abilities
• Suffered by experts who think they know it all.
• It is also spoken by Malcolm Gladwell as
miscalibration

8. Placebo Effect
• Seen in medicine where people expect
medicine to cure them. All they took was a
sugar pill
Pro-innovation Bias
• Overvaluing an idea.
• People over value their perception.
They think they have a developed a
more clever and better way to process
something.
• They undervalue some of its
limitations
• Creators come to love and overvalue
their own creations
• We assume wrongly others see the
world the same way we do

9. Recency
• New incoming data is given greater import than prior
information. Fads impair our judgment like Bitcoin.
• One’s time frame is limited
• In stocks people may not take the long-term view of a
proven method to prosper in the market
Salience
• We concentrate on a tangential importance of a matter
rather than the likely a major aspect.
• We might focus on dying by lightning but instead
something that has a greater statistical chance.

10. Selective Perception
• We allow our expectations
to influence how we
perceive the world.
• Law enforcement
presumes the spouse of a
terrorist knows what he is
up to. Any and all things
that contributes to this
worldview is presumed to
be true.
• It is also is know as having
a selective memory
Stereotyping
• We conclude a certain
demographic groups
have 100% conformity
to having certain
behaviors and attitudes.
• We can misjudge
people.
• We resort to it as a fast
method to come to a
conclusion

11. Survivorship Bias
• We only hear of successful business
startups, marriages, etc we wrongly
forget there are a host out there of
failures
• We are exposed to seeing little to no
failure, we assume a business or startup
must be easy.
Zero-Risk Bias
• We love certainty.
• We think if we eradicate any and all risks
there is no chance of harm
• Trouble all of life is a risk, even if we do
nothing we forfeit something else.

12. The End
Created A Haller
1. Anchoring Bias
2. Availability Heuristics
3. Bandwagon Effect
4. Blind-spot Bias
5. Choice-supportive bias
6. Clustering Illusion
7. Confirmation Bias
8. Conservatism Bias
9. Information Bias
10. Ostrich Effect
11. Outcome Bias
12. Overconfidence
13. Placebo Effect
14. Pro-Innovation Bias
15. Recency
16. Salience
17. Selective Perception
18. Stereotyping
19. Survivorship Bias
20. Zero-Risk Bias