Cognitive Bias

Rational thinking is very slow, if you think about it (pun intended). To rationally make a decision, we usually have to slow down our thinking; we have to consciously think and deduce information in front of us, how we can get from “A” to “B” to “C” etc. – it’s slow! While it can be more efficient, it’s also incredibly time-consuming. To survive in wilderness, we simply didn’t have this time – we had to “connect the dots” fast to compare the information – or whatever is happening in front of us – with other information that’s already stored in our brain. Therefore, our brain is hardwired to use mental shortcuts to speed up mental processing, without us rationally realizing it.  

Nevertheless, it’s also subject to certain limitations. We all construct our own “subjective reality” based on our hardwired cognitive connections and the information that’s already stored in our brain. To construct our own reality quickly, we also need to process information quickly, so we rely on cognitive biases as mental shortcuts. However, a cognitive bias can also be a disadvantage – it can be a systematic error in thinking, processing and interpreting information in the world around us.

Whenever clients come to see me, I usually explain how our brain processes information. It’s helpful to know how certain cognitive biases influence how we interpret and perceive information from other people; at the end of the day, it’s also influencing our emotions. 

It’s OK to make mistakes when we make quick connections and decisions because we are hardwired to do so. However, it’s also equally important to be aware of mental shortcuts and cognitive biases; we should be able to “re-think” some of our initial decisions by slowing down and appropriately rationalizing certain decisions. There are quite a few cognitive fallacies out there, but I’d like to introduce you to some of the cognitive biases that I often work with.

Spotlight effect

This cognitive bias makes people believe that they are being noticed much more than they really are. Think about it – you live with yourself 24/7, you always hear your own thoughts, always thinking about yourself. It sometimes makes us believe that other people are similarly thinking about us. It is important to remember that most people are more concerned about themselves than they are about you. The next time you feel like the center of attention, it’s important to remember the spotlight effect. Also, try to remember that most other people are most likely concerned with their own thoughts.  

Anchoring

Human minds connect things to speed up cognitive processes; your judgement can be heavily influenced by the first piece of information. Whenever we make estimates and judge if something is cheaper, better, taller, etc., we usually judge it from the reference point of our first available information, the “anchor”. This knowledge is especially useful for financial negotiations because the first number we see has a significant effect on how we perceive the following prices. For example, if you see pants for $ 1500 and then another pair of pants for $ 100, you perceive the second pair automatically as “cheap”. If you see a pair of pants for $ 20 and then another one for $ 100, you would perceive the second pair as “expensive”. 

Confirmation Bias

A confirmation bias impacts how we gather, store, and disregard information. Human minds are prone to look out for any pieces of information that justifies our existing beliefs. Any other pieces and bits of information that possibly contradict our existing beliefs are more easily disregarded as “fake”, not relevant, or we simply oppose it. Over time, our own assumptions take over and confirm themselves. This is especially relevant for people with social fears; they constantly monitor their environment for any negative social clues. Even neutral behavior may be interpreted as something negative, while positive behavior is disregarded as a “fluke” or just random accidental behavior. It’s also relevant for political beliefs that may be reinforced by only consuming certain news or websites.

Sunk cost fallacy

It may be harder to let go (loss aversion) of something or someone if a lot of time, energy, emotions or money was already invested. However, we also lose more in the process of hanging on. Human minds have a natural aversion to pain, and it creates pain and uncomfortable feelings when we realize that something or someone is a lost cause. Our brain is hardwired to avoid any uncomfortable feelings or pain, so we try to hang on. We may justify it by thinking that it has to get better at some point; sunk cost fallacy makes it difficult for people to let go. It can cause us to make unwise investments, or to hang on to unwise investments or unhealthy relationships (because we tell ourselves that we already invested so much money and/or time).

Dunning-Kruger effect

This cognitive bias describes the behavior of people who wrongly overestimate their knowledge or ability in specific areas. Experts usually know how much they know, but they also know how much they don’t know, and they are prone to underestimate their abilities and skills. However, it is very easy to be over-confident if you only have a simple idea of something; your incompetence keeps you from recognizing your own inability.

Framing effect

The way we perceive our information is strongly influenced by how it is delivered and framed. The advertising industry utilizes the framing effect by displaying information in a certain way. For example, it makes a difference if something is labeled as “5% fat” or “95% fat free” although the information behind it is the same. It also depends on how things are said and how the visual information surrounding it is presented (by using certain keywords, colors, fonts, etc.).

Availability heuristic

This cognitive bias is another example of a mental shortcut. Whatever information is easiest for us to recall or retrieve from our memory, that provides the best frame of reference for our future decisions. For example, if people see something in news stories, they are more likely to exaggerate the likelihood of things to happen. If you hear more stories about people being laid off, you may reconsider your spending habits; even though it may not affect you directly, you may overestimate the likelihood of you being laid off. 

Optimism bias

The optimism bias lets people believe that they are less likely to experience a negative event; the likelihood of positive outcomes is overestimated. A good example for that is smoking. Most people know and are aware of how negatively smoking affects their health. However, most people also try to rationalize it by saying “I can stop any time” or “It won’t affect me”, thus overestimating positive outcomes. One way to combat your optimism bias is to use your loss aversion (think about the losses and expenses that are likely to occur because of bad habits), and utilize your availability heuristic (make a conscious effort to read up on negative consequences, thus make bad events or consequences more easily retrievable from memory).

Dr. Mario Lehenbauer-Baum is a Licensed Psychologist in private practice in Wilton Manors, Florida.