Psychology: Cognitive Biases That Influence Everyday Decisions
Shikha Sharma
What are Cognitive Biases?
A cognitive bias is a reliable swing away from a standard or rational assessment in judgment processes. They tend to affect our thought processes and decision making, many times without our awareness.
Confirmation Bias
We have a habit of looking for, interpreting, and recalling information which is consistent with our previous views. Such behavior may lead to faulty judgments and perpetuation of false beliefs.
Anchoring Bias
Generally, the first primary datum received is used as an anchor for subsequent judgments. Thus, the first price thrown at us influences the estimation of worth of other similar things.
Availability Heuristic
We often make decisions and judgments based on information readily available in our heads. When we hear more about airplane crashes, we start thinking that flying is more dangerous than it actually is.
Hindsight Bias
It’s common for people to claim they knew something all along after the event takes place. Such bias may influence the way we interpret facts about the past and even make decisions in the future.
Overconfidence Bias
Biases arise out of inadequacies of the individuals, such as taking pride to presume that they know more than what is the case. Sometimes it may lead people into behaving badly when risks are taken that should not be taken.
Loss Aversion
It is understandable that we would rather not lose anything as opposed to earning the same profit instead. More often than not, our possessions can prevent us from acting because of the fear of losing them.
Social Proof
Therefore, our own decisions are influenced by majority action – if lots of people do something, then that is the correct thing to do. This can stifle individual thought and alternative courses of behaviour.
Understanding Cognitive Biases
Being able to acknowledge these biases prevents us from making poor decisions or at the very least assist us in making the most out of the situation. That is the first step towards avoidance of their deleterious effects on our everyday life, the recognition of the problem itself.
Every day activities are influenced by biases and people’s actions. In this respect, due to the awareness of cognitive biases, techniques of making effective decisions and living a better life would be achievable.