Chapter 13

Cognitive Biases: Short cuts and Dead ends 

       

 As brilliant as we humans seem to be at times, our brains are not sufficient to the task of processing the vast amount of input they receive at each moment to satisfy our needs for real-time safety and security. Also, we often lack sufficient information to make sound decisions. Cognitive Biases are mental shortcuts humans use to quickly decide what to think and how to act without much deliberation. All of us have them, and we can be thankful for that. Without these heuristics (rules of thumb and generalizations), we would likely have perished countless generations ago. In our present lives, they can still be of use, but they also can mislead us into making mental errors, which not only harm us but others as well.

Over 180 cognitive biases have been identified by psychologists and economists. We won’t cover them all here. But many fall into the following four categories based on human limitations:

We need to act fast, so…     


To stay focused, we favor the immediate, relatable thing in front of us. [Present bias]


We favor simple-looking options and complete information over complex, ambiguous options. [Ambiguity bias]


To avoid mistakes, we aim to preserve autonomy and group status and avoid irreversible decisions. [Status Quo bias]  


To get things done, we tend to complete things we've invested time and energy in. [Sunk Cost fallacy]          


To act, we must be confident we can make an impact and feel what we do is important. [Illusion of control]


We’d rather do the opposite of what someone is trying to make you do. [Reactance]     

 

There is not enough meaning in the available information, so…            

       

We fill in characteristics based on stereotypes, generalizations, and prior history. [Group attribution error] 


We tend to find stories and patterns even when looking at sparse data. [Clustering illusion]


We project our current mindset and assumptions onto the past and future. [Pessimism bias] 


We think we know what other people are thinking. [Illusion of transparency]   


We simplify probabilities and numbers to make them easier to think about. [Murphy's Law]         


We imagine things and people we are familiar with or fond of as better. [In-group bias]         

 

There is too much Information for our brains to process, so…               


We are drawn to details that confirm our own existing beliefs. [Confirmation bias]


We notice flaws in others more easily than in ourselves. [Naïve cynicism]             


We notice when something has changed. [Anchoring]     


Bizarre, funny, visually striking, or anthropomorphic things stick out more than non-bizarre/unfunny things. [Humor effect]


We notice things already primed in memory or repeated often. [Availability heuristic]     

 

We are unsure of what we should remember, so…                       


We discard specifics to form generalities. [Prejudice]       


We store memories differently based on how they were experienced. [Levels of processing effect]


We reduce events and lists to their key elements. [Recency effect]          


We edit and reinforce some memories after the fact. [False memory]      

 

Let’s use an example of how cognitive biases affect politics and public policy today. Unfortunately, in the year of this writing, the subject of Climate Change has become a political point of contention. Please bear with me if you feel the belief in climate change is an anti-free-capitalism hoax or just normal climate fluctuation or, if true, certainly not caused by humans. There is a chance you are correct. But for the sake of illustration, let’s assume the consensus of scientists from around the world is correct and that their theory that climate change is real, man-made, and a threat to the Earth’s ecosystem is correct. Why would so many people deny its reality? Let’s look at our cognitive biases.

Present Bias (“Now matters more than later”): People favor today’s comfort, today’s profit, and today’s convenience over future consequences. Psychologists call this temporal discounting.

Normalcy Bias: “If it hasn’t happened yet, it probably won’t happen.” People assume the future will resemble the past.

Confirmation Bias: People seek information that supports their worldview and ignore contradicting evidence.

Status Quo Bias: It feels easier and safer to keep doing what we’re already doing.

Optimism Bias: Optimism becomes a psychological shield. “Technology will save us.” “Someone else will fix it.” “We’ve always solved problems before.”

Here are a few more examples:

Social media companies derive most of their income from advertising. The more clicks a site gets, the more money it generates. Consequently, companies program their bots to feed us screens that confirm our existing interests and biases. They are exploiting our Confirmation Bias. The danger, of course, is that they cause public opinion to harden at the extremes without regarding the wishy-washy but more reality-based middle ground.

Genocide over the ages has been propagated by negative stereotypes of certain groups. In the 1930s and 1940s, German Nazis portrayed Jews as ugly, greedy, scheming, and dangerous. Such images fueled the murder of six million Jews during the Holocaust. There were many reasons European citizens permitted such brutality. But the Prejudice bias was certainly a major factor. Prejudice toward many ethnic groups continues to thrive in today’s world.

“In for a penny, in for a pound” is a saying we can use to justify making poor financial investment decisions. The related bias is the Sunk Cost fallacy.

As we will see in the chapter on Memory, every time we remember a long-past but significant event, we tend to introduce errors because we are remembering a memory of a memory of a memory, etc. This often leads to False Memory, especially when we prefer the more recent versions.

A thousand more examples could be given to illustrate our Cognitive Biases. But the important point here is to acknowledge the value in awareness of our cognitive limitations. We can be thankful we have heuristics that allow us to make quick decisions when faced with an avalanche of input. But we can, and should, reserve a degree of informed humility in our judgments that result in impactful behaviors.

In Chapter 14, we fill in more details about the human nature element we briefly touched on above – Memory.

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