Friday, Jan 15, 2021 06:00 [IST]
Last Update: Friday, Jan 15, 2021 00:31 [IST]
Ever wondered what leads you to make certain decisions? We assume decision making to be natural, that it comes from within. We know ourselves well and hence should be making decisions that would maximise our satisfaction. Seeing otherwise to this would be irrational since decision making feels so effortless and intuitive. We make ten and thousands of decisions every day, so it should be easy right? But according to Behavioural Science decision making is not that simple. Unknowingly we have been nudged by several different factors and our own fallacies to take biased decisions. This is due to the fact that decision making often runs on autopilot. When studying human behaviour, behavioural scientists have found that humans make 95% of their decisions using mental shortcuts or rules of thumb.
The reason that we should care about this field of study is because it makes us aware about the follies of human mind. Most decisions are pretty surprising and are often influenced by factors that we are ought not to be influenced by. For example, research show that when we are holding a cup of warm beverage we feel more warmly towards the people that we are interacting with. Hence even physical warmth is enough to confuse our brains with interpersonal warmth.
Therefore understanding some of the simple cognitive biases when it comes to decision making may help us to shift our decisions to a more cogent outcome.
1. Anchoring bias: Anchoring bias is a cognitive bias that causes us to rely too heavily on the first piece of information we are given about a topic. When we are setting plans or making estimates about something, we interpret newer information from the reference point of our anchor, instead of seeing it objectively. For example, imagine you’re looking for a place to rent. You find a room and the rent is around 8000 per month, you look at another place and find that the rent is 5000 which is still more than your budget, but hey, it’s cheaper than the previous one!
We can also learn to use anchoring bias in our favour. If you want a favour from a friend or a co-worker try asking for something difficult. They’ll refuse the difficult task and is most likely to oblige to your next request if it is comparatively easier than your first task. They will anchor their decision based on your first request and will be willing to do the next “easier task”. The anchoring effect is difficult (if not impossible) to completely avoid, but research shows that it can be reduced by considering reasons why the anchor doesn’t fit the situation well.
2. Bandwagon effect: The Bandwagon effect refers to our habit of adopting certain behaviours or beliefs because many other people do the same. Decisions that benefit many other people do not always benefit us. Many students get influenced to choose a particular field of study because their best friends or maximum of their classmates are taking it. To avoid being the odd one out, many of us go along with the behaviour or ideas of a group we find ourselves in. Conformity ensures some degree of inclusion and social acceptance. This can be taken a step further, as we can sometimes adopt or champion the norms or attitudes of the group to gain approval and bolster our position. It is important that we evaluate ideas and behaviours on the basis of their merit and what they could mean for us, and then make decisions accordingly. The bandwagon effect can prevent this from happening by convincing us that the right decision is the popular decision. Understanding this bias may finally lead us towards that path that we always wanted to take.
3. Confirmation bias: A confirmation bias involves favouring information that confirms your previously existing beliefs or biases. Confirmation biases impact how we gather information, but they also influence how we interpret and recall information. For example, people who support or oppose a particular issue will not only seek information to support it, they will also interpret news stories in a way that upholds their existing ideas. They will also remember details in a way that reinforces these attitudes.
If you are looking for a more positive year ahead try to focus your attention towards positive environment. Keep a gratitude journal, direct your attention towards more upbeat happy music, watch comedy shows instead of news or depressing dramas, meet people that would give you a fresh perspective towards life. The more we seek positive energy, the more of it we will find. If you believe there's good in the world, you'll begin to notice small acts of kindness in others, recognize moments of joy and the myriad of everyday examples that reinforce all the good that surrounds us. You’ll, begin to seek out confirmatory evidence and notice more to be grateful for.
4. Optimism Bias: The optimism bias refers to our tendency to overestimate our likelihood of experiencing positive events and underestimate our likelihood of experiencing negative events.
We underestimate the likelihood of us getting in an accident or getting the corona virus or having a failed marriage and we overestimate our longevity, success in our career paths. Parents have a huge optimism bias when it comes to kids; they always believe their kid to be the best, and to always do what is right. But we are more optimist than realist and we are oblivious of that fact. Cognitive neuroscientist and optimism expert Tali Sharot posts that the optimism bias was “one of the core causes of the financial downfall in 2008”. One reason behind Optimism bias is we generally want to feel as if we have control over our lives and our fates. Negative events like illness, divorce, or financial loss often threaten our plans or derail the predictions we have about ourselves. Optimism prevents us from lingering in these negative outcomes. But unrealistic optimism can lead to risky behaviours, therefore we should be able to come up with plans and rules to protect ourselves from unrealistic expectations and still remain hopeful.
5. Sunk cost fallacy: Individuals commit the sunk cost fallacy when they continue behaviour or endeavour as a result of previously invested resources (time, money or effort). This fallacy, which is related to loss aversion (losses loom larger than gains) and status quo bias (people prefer things to stay the same by doing nothing), can also be viewed as bias resulting from an ongoing commitment. For example, have you found yourself sticking to something even if you don’t like it anymore such as ordering too much food and trying to finish it just to get our money’s worth.
Sunk cost fallacy could be one of the reasons why we try to stay too long in a broken relationship. If you put a lot of emotional investment into a relationship, it can be very challenging to break it off. This can be true of any relationship, not just romantic ones. Perhaps one of your good friends is no longer a positive influence on you. Years of emotional investment make it very uncomfortable to cut your ties, but you might have to. The most important step to freeing yourself from making poor decisions based on sunk costs is to recognize the logical fallacy. Simply being aware of it will help you tremendously in making more rational decisions in the future.
When we take a step back even just a little bit on the thought process behind the decision that we are making, why is it that we came to a certain conclusion it can really help us to push ourselves in making better decisions. These are just few of the many cognitive biases we have. There are numerous books written on these topics such as Thinking Fast and Slow by Daniel Kahneman, Nudge by Richard Thaler and Cass Sunstein, Predictably Irrational by Dan Ariely. These books will definitely give you an upper hand on decision making and will help you understand some of the intricacies of your mind.
So start your new year by learning a bit about yourself and nudging yourself to a more positive year ahead.
Behavioral Science, Available at: https://www.optimizely.com (Accessed: 5th January 2020).
Cognitive Biases, Available at: https://thedecisionlab.com (Accessed: 5th January 2020).
Daniel Kahneman (2011) Thinking, Fast and Slow : Penguin.
Maya Shankar Why We Do What We Do? , Available at: https://www.youtube.com (Accessed: 6th January 2020).
Shadé Zahrai Your Brain Magnifies What You Focus On, Available at: https://www.youtube.com (Accessed: 6th January 2020).
Tali Sharot The optimism bias, Available at: https://www.youtube.com (Accessed: 6th January 2020).