Cognitive biases are systemic errors in thinking that negatively impact decision-making quality and outcomes.
THREAD: 20 cognitive biases to learn (so you can think clearly and make better decisions):
Fundamental Attribution Error
Humans tend to:
(1) Attribute the actions of others to their character (and not to their situation or context).
(2) Attribute our actions to situation and context (and not to our character).
We cut ourselves a break but hold others accountable.
Bandwagon Effect
Humans are a social species - this allowed us to thrive.
But it also has a downside…
It creates a strong tendency to speak, act, or believe things simply because a lot of other people do.
Bandwagon effect is similar to "groupthink" and is very dangerous.
Egocentric Bias
The human tendency is to have a higher view of one's self than is objectively warranted.
In group activities, we tend to overestimate (in comparison to objective measure) the degree and value of our own contributions relative to others.
Naïve Realism
Humans think very highly of themselves (see egocentric bias!).
We tend to believe that we see the world with perfect objectivity (cognitive biases be damned!).
We also assume that people who disagree with us must be ignorant, uninformed, or biased.
Baader-Meinhof Phenomenon
Ever notice that something you just learned seems to pop up everywhere around you?
The Baader-Meinhof Phenomenon says that increased awareness of something creates the illusion that it is appearing more often.
Like seeing 11:11 on your iPhone clock...
Pygmalion Effect
High expectations lead to high performance (and vice versa).
Those who have high expectations placed on them are more likely to internalize these expectations and improve their performance accordingly.
Leaders may attempt to use this to their advantage.
Confirmation Bias
Humans have a tendency to see and interpret information in a manner that supports previously held beliefs.
New data positive? This idea is a slam dunk!
New data negative? Must have been an error in the experiment.
Very common and very dangerous.
Backfire Effect
The "backfire effect" is the tendency for humans to use evidence in direct conflict with their thesis to further strengthen their previously held beliefs.
It is a more dangerous version of confirmation bias (also less common and scientifically contested).
Anchoring
The "anchor" is a reference point of information (usually the first piece of information received on a topic).
All subsequent thinking or decisions are silently "anchored" to this point.
Anchoring has been proven by scientists (and used car salesmen) time and again.
Dunning-Kruger Effect
People with a low ability at a task are prone to overestimate their ability at that task.
Humans are notoriously incapable of objective evaluation of their competency levels.
Remember: Everyone is a genius in a bull market.
The Ben Franklin Effect
"He that has once done you a kindness will be more ready to do you another, than he whom you yourself have obliged."
Doing a favor makes you more likely to do another for that person than them doing a favor for you.
We reinforce our self-perceptions.
Loss Aversion
First identified by famed scientists Amos Tversky and Daniel Kahneman, it says the pain of losing something is more powerful than the pleasure of winning it.
As such, humans will typically do more to avoid losses than they will to seek gains.
Endowment Effect
Related to loss aversion, the endowment effect says that once we have something, we don't want to give it up.
Humans will demand more to give up an object than they would be willing to pay to acquire it.
Availability Bias
Humans evaluate situations based on the most readily available data, which tends to be what can be immediately recalled from memory.
This is how the news cycle impacts our thinking. Its persistent negativity cements a belief that the world is a dark place.
Survivorship Bias
History is written by the victors.
But concentrating on "survivors" and systematically ignoring "casualties" of any situation leads to distortions in our conclusions.
We overestimate the odds of success because we only read books about the successes!
The Ikea Effect
People ascribe significantly more value to objects that they have created or assembled, irrespective of the final quality of the object.
We infuse our own self worth into the object, thereby increasing its value in our minds.
Hindsight Bias
Humans tend to believe that events of the past were more predictable than they actually were.
We examine the past with the benefit of hindsight but fail to recognize its impact on our thinking.
Hindsight bias can meaningfully distort our memories.
Plan Continuation Bias
Humans love plans.
Even when the plan appears to be failing (or no longer an appropriate fit for a given situation), we have a tendency to want to continue.
The dangers of a rigid "stick to the plan!" mentality are very real.
The Gambler's Fallacy
Humans are naturally bad with probabilities.
The Gambler's Fallacy says that we have a tendency to believe that past events alter future outcomes (when they clearly have no impact).
Ever thought you were "due for a win" in roulette. You're falling prey.
Curse of Knowledge
Experts (or generally, intelligent people) tend to make the flawed assumption that others have the same background and knowledge on a topic as they do.
They are unable to teach or lead in an effective manner for those still coming up the learning curve.
Cognitive biases have a profound impact on our thinking and decision-making every single day.
The first step to fighting back? Awareness. I hope this post helped with that!
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I will be turning this thread into a longer-form piece for my newsletter, where I will explore these biases in greater depth (including examples and ways to combat them!).
It will be released in the coming days.
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This thread is going to become a multi-part newsletter series on cognitive biases, including examples of each and practical ways to combat them.
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The Cognitive Bias Handbook
The newsletter deep-dive (part 1 of 2) is now live in your inbox and ears! Please enjoy, share, and subscribe if you haven’t already. sahilbloom.substack.com/p/the-cognitiv…
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