Decide Vol. 003 – Understanding and overcoming decision-making biases

Decision-making biases are errors in our judgment that affect the accuracy and objectivity of our decisions.

Most of the time we are completely unaware of them and their influence on our choices. This can result in mistakes that not only affect us but also our loved ones and society.

In this volume of Decide, we will explore some of the most common decision-making biases and define them in simple terms. As Charles Kettering once said, “A problem well-stated is a problem half-solved.”

By recognising them, we can tell when we are falling into their traps and make better decisions.

To aid in this, we will also look at some examples and techniques to overcome these biases.

So, come on let’s get started on improving our decision-making skills!

1. Confirmation bias

Confirmation bias is when we seek out information that confirms what we already believe and ignore information that contradicts it. This can lead to bad decisions because we only see part of the picture.

Here’s an example: Imagine there’s a detective named Derek investigating a crime. At the beginning of the investigation, he thinks he knows who did it. He only looks for evidence that supports his theory and ignores anything that doesn’t fit. This means he might miss important clues that could lead to a different suspect.

Like Derek, when we have a confirmation bias, we only pay attention to things that confirm our beliefs, even if they’re not completely true. It’s important to be open-minded and consider all the facts. If Derek saw some evidence that pointed to someone else, he should investigate that lead too.

Having a confirmation bias can make us miss important information and prevent us from finding the best solution. To make good decisions, it’s important to look at all the evidence, even if it challenges what we know.

“If you want to assert a truth, first make sure it’s not just an opinion that you desperately want to be true.”

Neil deGrasse Tyson

To avoid having a narrow-minded view and making uninformed decisions, it’s crucial to overcome confirmation bias by seeking out different opinions and information. This involves actively challenging one’s own beliefs.

If Derek wants to overcome his confirmation bias, he needs to take a factual approach to his investigation. This means considering all evidence, even if it goes against his initial theory, and evaluating it. Derek must also acknowledge the possibility that he may be wrong and explore alternative explanations.

Sometimes, like Derek, our ego can get in the way (Ego Is The Enemy), leading us to overlook other options and make biased decisions. To prevent this, we can challenge our beliefs, consider different viewpoints, and talk to people with differing opinions. It’s also important to look at the opposite side of our situation and question it.

Think about some of your recent decisions, have you made any that have been decided because of a confirmation bias?

2. Anchoring bias

Anchoring bias is the tendency to rely on the first piece of information encountered when making a decision.

This bias can result in people anchoring to an initial estimate or value, even if new information contradicts it.

Let’s say someone is told that a house costs £500,000 and they’re given a brochure with that price on it. Even if they later learn that the house is worth less than that, it might be tough for them to accept that new information.

“A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.”

Daniel Kahneman,

Two points to overcome anchoring bias:

1. it’s important to be aware of the impact that initial information can have on your decision-making
2. seek out and consider alternative perspectives

First impressions leave an anchor behind. The next time you are experiencing something for the first time consider the Anchoring bias.

What anchors do you have stuck on the seafloor of your mind?

3. Framing effect

The Framing effect is when people make decisions based on how information is presented, rather than the actual information. This can cause people to make different choices even if the information is the same.

For example, if a policy shows that its measures are reducing the number of deaths, people may be more likely to support it than if it is presented as increasing the number of lives saved.

“Framing effects can be very influential, and to the degree that you can think of a task as close rather than distant, you’re more likely to actually get it done.”

James Surowiecki

To overcome the Framing effect, there are two important things to keep in mind:

1. be aware of how information is presented to you
2. consider how different framing might impact your decision-making

It’s important to remember that the way you say something can change how someone reacts to it, even if it’s the same information. So, always be mindful of how information is framed when making decisions.

4. Availability bias

The Availability bias is the tendency to make decisions based on the most recent or accessible information.

This bias can lead to people making decisions based on limited information or on information that is not representative of the overall situation.

This is one of the important things that modern psychology has discovered thanks to the work of Amos Tversky and Daniel Kahneman, we remember things that are important and that have happened recently more easily.

Our brains naturally do this to save energy, and we can’t stop it. If we remembered everything, it would be too much for our brains to handle.

For example, a person who only watches news from a single channel that confirms their beliefs may make decisions based on incomplete or skewed information.

Two Three points to overcome availability bias:

1. it’s important to seek out a diverse range of information
2. to be mindful of the sources of information you rely on
3. Turn off the news ;)

In conclusion, decision-making biases can have a significant impact on the accuracy and objectivity of decision-making processes.

By understanding and overcoming these biases, we can make better decisions and avoid errors in our judgement.

Enjoy the rest of your Wednesday, and I’ll see you next week.

Ty

P.S. Say hey on Twitter and if you have a moment I would love your feedback on this volume, you can leave a comment here.