COGNITIVE BIASES

heuristics

It is simplifying complex situations, and using the rule of the thumb to solve problems.

Mental shortcuts, and simplifying descision making.

overconfidence bias

Over estimating ones physicals and mental capabilities that result in results far from accurate.

It includes overestimation of performance.

A new person in the gym cannot lift heavy weights.

immediate gratification bias

It is the preference of temporary and quick benefits over long term benefits.

For example: A movie night is more rewarding that studying to graduate.

anchoring bias

• rely too heavily on an initial piece of information (the "anchor") when making decisions,

• even if that anchor is irrelevant or misleading. This skews judgment and estimation.

• If a car salesman first shows a customer a car priced at $30,000, the customer might perceive a $25,000 car as a good deal, even if $25,000 is still expensive for that model.

Selective Perception bias

• The tendency to perceive and interpret information in a way that

  • aligns with one's existing beliefs or expectations, ignoring contradictory data.

• A sports fan may only notice and remember plays that favor their team while ignoring mistakes or poor plays made by the same team.

confirmation bias

Seeking out information that reaffirms past choices and discounting contradictory information.

During hiring, a manager who believes an employee is excellent looks only for evidence supporting this view, ignoring any flaws (halo effect)

framing bias

Selecting and highlighting certain aspects of a situation while ignoring other aspects.

The way certain information is protrayed, skews judgements.

People are more likely to choose a medical treatment described as having a "90% survival rate" than one described as having a "10% mortality rate," even though both mean the same thing.

avaliablitiy bias

Losing decision-making objectivity by focusing on the most recent events.

Plane crashes, are not common, but recent.

sunk cost bias

Investing time, money, and other investments in past problems where future costs outweight future benefits.

A person invested a lot in graphics course but they got a job in banking, they rejected it because of graphics investment.

hind sight bias

The tendency to see past events as more predictable than they actually were after the outcome is known.

Some people believe that a team was to lose the match when they lose it, despite not knowing the odds, prior.

additive bias

Using the additive or multiplication rule in certain situations where subtraction is clearly the better option. Or doing more than what is needed.

For example: Working out more, when it is necessary to take breaks.

self serving bias

Taking quick credit for successes and blaming outside factors for failures.

Common in groups where the loss includes everyone, but the success is for themselves.