This is part two of the cognitive bias series. You can access part one here.
Cognitive biases serve a useful evolutionary purpose: they help us process and react to sensory inputs and information quickly, they protect us from experiencing unpleasant feelings, and they enable us to respond to incoming threats. But to fulfil this fast thinking role, our brains also need to ignore a lot of information. As such cognitive biases leave us vulnerable to bad decisions.
We’re all prone to them and while they are errors in thinking resulting from our brains’ normal function, they are systematic and predictable. Awareness of our tendency for them can help us navigate the blind spots in thinking they create and make better decisions.
This series discusses some of the more common cognitive biases, their implications and some thoughts on how we can overcome their negative impacts.
Confirmation bias: we favour that what we already believe
Confirmation bias is our tendency to notice, favour and give greater weight to information that confirms our preconceptions, while ignoring information that challenges our pre-conceived notions.
If you believe that walking is more beneficial than running, you may pay more attention to articles that support your view and overlook studies that prove the opposite.
Implications and blind spots
Confirmation bias affects our decision-making and critical thinking. We may ignore important information when making decisions because it doesn’t fit with the broader picture. We may also be less likely to question our own beliefs and assumptions.
We’re biased to our first impressions of people and we purposefully try to sustain them. We’d interact with people in a way that supports our view of them and we may be closed to noticing characteristics and traits that clash with our idea of the person.
Benefits of overcoming it and some thoughts on how to
Overriding our tendency for confirmation bias helps open our thinking to new information and possibilities. There is a comfort in allowing the uncomfortable and learning to not fighting against it. This may be one way of dealing with confirmation bias.
Loss Aversion: loss has a stronger impact on us than gain
We experience the impact of losing stronger than we experience the impact of winning—a phenomenon known as loss aversion. Psychologists Daniel Kahneman and Amos Tversky who introduced the concept suggest that psychologically losses can be twice as powerful as gains. The pain of losing $100 is experienced more strongly than the pleasure of winning $100.
Implications and blind spots
The emotions we experience when we make a mistake are stronger than the emotions we experience when we do something well.
We may resist changing course if we believe it suggests that we’ve failed.
We tend to prioritise avoiding losses over making gains. We may avoid taking sensible risks with good returns even when the chances are overwhelmingly in our favour.
Benefits of overcoming it and some thoughts on how to
Awareness that loss impacts us more strongly than gain can help us processes setbacks, mistakes and failures better. Knowing that we’re biased to experience negative emotions more viscerally can be beneficial in putting our feelings in context, overcoming self-judgement and moving on.
Recognising that not taking on risks for fear of losing is a loss in itself can help us take better decisions.
Sunk cost fallacy: we don’t want to invest time, effort and money in vain
Once we’ve invested effort, time, or money into something, we are more likely to persevere with it even if it’s failing. We are so averse to sunk costs that we’d go against evidence that suggests a certain decision is no longer the best course of action just because we don’t want the investment we’ve made into it—be that in terms of time, work or money—to be in vain.
A large-scale example that illustrates that is the Concorde aircraft project—a 1954 joint venture between Britain and France to build a cutting-edge supersonic passenger jet, capable of flying from London to New York in just under three hours. Despite the budget overrunning from £70 million in 1962 to £1.3 billion in 1976, technical difficulties and limited commercial viability, both governments continued to fund the project, eventually retiring it in 2003 after a crash killed 113 people.
Implications
We are likely to persist with dysfunctional products, start-ups, businesses, relationships.
We continue to support losing propositions, even though it’s clear that quitting is in our best interest.
Benefits of overcoming it and some thoughts on how to
Our reluctance to sunk costs can lead us to stick with failing projects, dysfunctional businesses, bad relationships even when we have overwhelming evidence that stepping out is our best option.
Recognising that often in life we’re pass the point of a perfect scenario and that every time we choose something we “unchoose” everything else can be helpful in navigating our emotions.
We can examine things we’ve been struggling with for a while, challenging aspects of our life, and asks ourselves what role our aversion to sunk cost is playing in our perseverance. Sometimes it’s better to scrap and start over—even though that may not be the most comfortable short-term option.
Cognitive biases are a useful feature of our thinking processes that have served an evolutionary purpose in protecting us and enabling us to navigate threatening and unpredictable situations to the best of our abilities. But they also expose us to systematic errors in thinking which can compromise our decision-making abilities. Familiarising ourselves with some of the more common cognitive biases can help us assess our life and circumstances with more objectivity and make better decisions.