Cognitive bias is deeply seated, fundamental, psychologically fixed bias of systematically shaping or otherwise orienting information in a specific direction. It leads people to carry out psycholinguistic simplification of wishful, emotional and past experience, instead of rationalization of these by means of an objective truth.
They have wide ramifications from investment decisions and employment decisions, social interactions, mundane routine, to the internal mental process of an individual. The identification of such biases also plays an important role towards the realization of critical thinking and prevention of disinformation, as well as the improvement in the informed choice making.
What Is Cognitive Bias?
Cognitive bias, in fact, is an implicit process or drive to go beyond rational thinking. It happens when a brain, with a massive amount of pertinent information, applies heuristics (mental shortcut) to limit or reduce a decisional process. While these shortcuts make work faster and easier, these shortcuts can be misused to manipulate the world such that a faulty inference and a bad decision can be reached.
For instance IF you maintain a strong belief of the corresponding political position and, in turn, to that position, you can only access news only of so-called political position, it is a manifestation of confirmation-bias (i.e., the tendency of favoring information that supports a current position and rejects information contradicting such position).
All these impacts can be retraced on planning, cognition, memory and, therefore, on all the other life domains (finance, interpersonal relations, occupational, social interactions, etc.
Common Types of Cognitive Biases
Cognitive biases are numerous and pervasive to various domains of cognition and behavior. Some of the most well-known include:
- Confirmation Bias
People are employed in a specific way, namely to accept a data set when it is true to boost confidence and to reject a data set when it is false to cancel out faith. This bias feeds conjectures and is very challenging to overcome when thinking of new ideas. - Anchoring Bias
When such a decision is made, the first piece of information received gets high weight in humans. For example, in price bargaining, the starting number may be directly influential on the final outcome, since it is ridiculous and even if it is not. - Availability Heuristic
Humans estimate occurrence probability on the basis of how well they are able to retrieve items from category. For example, after reading news reports about a plane crash after sitting through collective consciousness, an individual’s judgment about flight risk may be biased for air travel, when air travel is statistically much riskier than automobile travel. - Halo Effect
A single, positive characteristic influences the subjective experience of an individual and/or an object. For example, a rather attractive person might be assumed to be a smarter or more competent person, just for the sake of how the purely statistical relation looked good even in the absence of evidence for its superficiality).
How Cognitive Bias Affects Decision-Making
Cognitive biases are involved in all the person’s, professional and public lives decisions. They influence how people:
- Process information: Biases shape how we filter, interpret, and remember facts.
- Form opinions: They confer authority upon current stands (i.e., it is quite hard to challenge current stands).
- Make choices: Outliers result in superstitious moneyed investing, poor work, and poor behaviour.
- Interact with others: Social prejudice drives how we behave towards other groups and towards individuals themselves.
For example, when they are in a workplace situation, when they are being interviewed they may subtly target people in order to personify affinities (affinity bias), or assign anointing status to a person purely on the basis of a perceived feeling of confidence (halo effect). In investments finance, overconfidence bias pushes the investor to neglect warning signals and take poor financial risks.
Cognition biases can also affect what happens in the public arena in the form of stereotyping, disinformation and irrational political decision making. Understanding the impact they have on the choices that are made is the first step toward more rational, fair and data-driven choices.
Wrap Up
Cognitive biases affect cognition, behavior, and decision making in a way that typically leads to poor choices and inefficient reasoning. These are nonspecific and naturalistic, and while they are unavoidable because of the humanistic and reflective processes underlying consciousness, it is possible to understand which biases these are and how they can be at least partially controlled by using critical thinking devices.
Denying assumptions, viewing things from a variety of different angles and using evidence-informed craft to the challenge, individuals and organisations can stimulate improved judgment, reduce mistakes, and participate in more reasonable multi-direction and unbiased decision-making.
