Anchoring Bias: The habit of comparing and contrasting a product from a limited sample of items. Restaurants, supermarkets and E-bay sellers use this bias a lot. They set a high price of a very similar item that you are interested in purchasing. This “anchors” a fictional price to give you the illusion that what you are buying must be a better deal. One way to avoid this type of bias is to research your products thoroughly before you make you final decision.
Bandwagon effect: The tendency to do or believe things because a group of people do or believe as well. It does not have to be a large group it can happen within a family, a group of friends or throughout the nation. This bias is what causes many online trends and social norms. Part of the result of this bias is a result from the desire to fit and be part of a general group.
Negativity bias: It is occurs because people have a greater recall of unpleasant memories than positive ones. We tend to pay attention to more bad news than good. News stations focus heavily on negative events. This is a result of our erroneous perception that negative information is more important and it is probably an end product of evolution and survival of our ancestors. It is easy to ignore good news or a good situation, but ignoring a bad one might have resulted in being some ancient animal’s breakfast.
Gambler’s Fallacy: This happens when we think that the future probabilities are affected by the past, but in reality they are unchanged.
For instance flipping a coin five times in a row on tails tricks your brain to believe that heads should be coming up shortly. The truth is that every time you flip the coin there is a 50-50% chance of getting tails or heads. The past events do not affect the present one. This thinking can have a detrimental effect on gamblers for instance, where they predict that if they lost so many times in a row a good run should be right around the corner.
Confirmation bias: The tendency to search for, interpret, focus on and remember information in a way that fuels our own preexisting views and opinions; while ignoring opinions or view from others that threaten ours. This is why we love and feel better with people that constantly agree with us and why we tend to join groups that have similar views and tastes.
Understanding cognitive biases and making a conscious effort to try to avoid them is one of the first steps to make better decisions. It is not an easy task and we all at one point or another have been affected by them. Although making decisions can be as simple as picking a pair of shoes to go for a walk, it is the more complex tasks or situations that require fine tuning when making a choice. It is important to understand that time, emotions, and our own personal experiences are crucial components of the decision making process. You need to think outside the box, control your impulsive behavior and analyze each situation before you make an important decision. It is up to you to decide how you will make better choices in your life.
German Garcia-Fresco, PhD.
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