Cognitive Biases - Braving The Brain Barriers !

Cognitive Bias

Time for Reflection

Haven't we all been victims of distorted thinking, at some point in our life, that lead to poor judgement and bad decision-making on our part; the times when when we acted irrational and took decision based on certain influences/ factors ?

What is Cognitive Bias ?

This sort of behavior where people commit systematic error in thinking that affects their decision-making and judgement, resulting in an irrational behavior, is termed as Cognitive Bias. The mistakes/ errors in reasoning, evaluating, remembering or any other cognitive process are examples of cognitive biases.

Why/ How does Cognitive Bias occur ?

Our brain has a tendency to 

• look for shortcuts while processing information
• perceive information through a filter of personal experiences and preferences

So, when our brain is presented with a need to take decision based on the vast amount of information it has to deal with, the brain tries to create shortcuts (heuristics) to simplify information processing. This is what creates the Biases. These shortcuts are based on the existing beliefs and preferences that  we tend to hold onto.

Few Key Things About Cognitive Bias

• Since it is not possible to eliminate the brain's disposition to take shortcuts, so biases are bound to occur. 
• there are different types of cognitive biases, some related to memory, some related to attention and many more related to other conscious part/ activity of our brain.
• It's not possible to eliminate biases always, but we must try and minimize the impact of the biases
• Biases are not always negative or limiting in nature. Many biases create a positive impact on us and help us in effective decision-making  

Studying Popular Biases

I have attempted to detail few important/ popular Cognitive Biases (mostly) through my blog series on the same. Listed below are 20+ biases with hyperlinks to the respective posts. 

Anchoring Bias  - Blind Spot Bias  - Confirmation Bias - Distinction Bias - Egocentric Bias

Fading Affect Bias - Groupthink Bias - Hindsight Bias - Implicit Bias  - Just World Bias

Kantian Fairness Tendency - Loss Aversion Bias - Money Illusion Bias  - Negativity Bias

Optimism Bias - Projection Bias - Quality Consciousness Bias - Restraint Bias 

Scarcity Bias - Trait Ascription Bias - Unit Bias - Von Restorff  Effect  - Wishful Thinking -

Xtra Bias  - Yin-Yang Effect - Zero Risk Bias

Hope you enjoy reading them all and find the posts useful. 

Zero Risk Bias

Zero Risk Bias

Time for Reflection 

When it comes to issues related to our health, housing, safety and security, don't we all look for a fool-proof solution, where we expect a complete elimination of the possible risks ?

Somewhere, while expecting a complete elimination of the possible risks, we have fallen trap to the "zero-risk" bias.

Definition

Zero Risk Bias is the tendency to prefer the complete elimination of a risk even when alternative options produce a greater overall reduction in risk. So, while making a choice, our brains prefer to select an option that totally eliminates the risk over options that could, in fact, eliminate more risks and end up with better results. This bias leads us to ensure absolute certainty of outcome while making decisions.We prefer guaranteed benefits over the possibility of much more significant benefits. 

This bias makes use of the human tendency to prefer large decrease in small risks to small decrease in large risks, even when the overall benefit of the latter is vastly superior to the former. Zero risk bias is an extreme form of this behavior, often triggered under conditions of uncertainty.

Few possible reasons for the bias to occur are

• thinking proportionally instead of thinking quantitatively
• minimizing cognitive strain - by eliminating one risk entirely, we reduce the amount of cognitive strain we face, making the option more appealing. 

This bias has applications in many areas such as financial investments, laws related to food and health, sales and marketing, quality adherence and assurance in various domains. This bias proves to be a blessing in disguise when we talk about eliminating zero % harmful elements from food products. Many of the public health/ hygiene, safety campaigns may also promote a zero elimination for the larger benefit of the masses. But for many other area, its at the discretion of the customer/ investor/ stakeholder, like, an investor, might opt for a choice based on his/ her risk and return appetite. 

Zero-risk bias can be reduced by re-framing the problem and building in a different perspective to the problem/ situation, focused on the other side. Being aware of the potential risks helps in addressing the problem at hand. Perhaps the most important strategy to mitigate the impact of zero-risk bias is to be well aware that we live and thrive in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world. This VUCA world is dynamic in nature and full of risks where every moment could present a new challenge. The best way to thrive in this VUCA world is to upgrade our decision-making and critical thinking skills so that we become more rational in our approach. 

Risk is Real - Don't Avoid It, Just Embrace It !

Yin-Yang Effect

Yin-Yang Bias

About Yin-Yang Bias

Talking about equilibrium and duality in life and by default Yin-Yang occurs in the scenario. The concept describes how seemingly opposite or contrary forces may actually be complementary, interconnected and interdependent in the natural world, and how they give rise to each other as they interrelate to one another.

The same concept of Yin-Yang may act as a bias and affect us while seeking holistic well-being, work-life balance, spiritual awakening. When yin-yang bias affects us, our quest for a balanced life takes a hit.This bias results in the feeling of incompleteness as we are always seeking the missing component of yin-yang to complete the picture.  

Few of the key challenges posed by this bias is  

• to focus on which part of the yin-yang 
• Deciding how much to incorporate (the magnitude)
• Deciding how long to incorporate (the frequency) 

The yin-yang bias could be addressed by  

• Accepting the unpredictable and incomplete nature of life
• Practicing Mindfulness 

Xtra Bias

Xtra Bias

Time for Reflection

Has there been times when you wanted that extra bit or that add-on to motivate you to decide "in favour", maybe while shopping for your favourite dress, negotiating for your house with a realtor,  negotiating for your salary package with a new employer, or any other similar situation.

The above tendency to look for that extra bit is an indicator of presence of "Xtra Bias".

Definition

Xtra Bias is exhibited by a tendency to decide only when something "extra" gets provided.

Humans always want that something "extra" as part of the bargain or deal. This "extra" is what provides them look out for that something "extra" to allows to decide. Whether we go shopping, or negotiating or communicating, interacting/ connecting, we are always on the look out for that "add-on". Somehow, when we are affected with this bias, we see "value for money" proposition in our every deal.

The occurrence of bias may possibly be because of 

• self-centric or ego-centric natute of humans
• tendency to seek "value for money"  
• assumption that the things/ goods are over priced

This bias impacts us negatively by

• prompting us to undervalue things, though they may be rightly priced.
• overestimating our ability to negotiate a better deal

The bias also has a positive side by way of building our ability to manage a "Win-Win" scenario in every situation involving 2 or more stakeholders.

Few ways, the damage of "Xtra Bias" could be mitigated are

• be up-to-date date with the latest pricing trends 
• do a comparative before taking final decision
• opt for a trust worthy brand or a brand you trust

Wishful Thinking Bias

Wishful Thinking Bias

Time for Reflection

Haven't we all engaged in wishful thinking, some time or the other, and then realising that things don't turn out to be as we assumed them to be ?

Well, the only explanation to the above is that there's a difference between illusion and reality and we tend to ignore it because of a fallacy known as "Wishful Thinking"


Definition

Wishful Thinking Bias refers to the tendency of decision-making and belief formation based on what might be pleasing to imagine, rather than on evidence, rationality, or reality.

Our interpretation of things is around how we want to interpret them and not as how they actually are.  Few examples of wishful thinking are - hallucinations, religious/ spiritual beliefs, day-dreaming, assumptions aligned with our beliefs and goals.

Wishful-Thinking Bias is an outcome of 

• our belief in something that we believe to be true/ false
• overstimation of our abilites which may, in fact, be influenced by our earlier success or failure and impacted us to develop generalisations
• our inability to actualise things and therefore falling back upon being wishful
• our long-held belief, maybe as a result of our culture or religion

Few of the key negative impact of the Wishful-thinking bias are that 

• it leads us into creating a self-affirming universe of ours, a Utopia, which, in fact, might be a Dystopia  
• it may hinder our progress and growth
• leads us to develop self-limiting habits like procrastination, etc.
• it may have a detrimental impact on our self-confidence and self-esteem, when we realise that things have not turned out to be as we wanted them to

Some of the simple ways to address wishful thinking are to

• become more action-oriented
• spend sufficient time in planning stage 
• take smaller steps
• establish realistic goals and do a regular follow up on progress made
• regularly update our belief system (wherever and whenever needed)
• ensuring that our religious beliefs and practices do not turn into an obsession

Von Restorff Effect

Von Restorff Effect

Time for Reflection 

What do you observe in the following lists ? 

• Apple, Orange, Pineapple, Guava, Kiwi, Papaya, Watermelon
• Red, Green, Blue, Black, Brown, Yellow
• Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday

In all the above three lists, you tend to remember Guava, Green, and Monday respectively because these words stand apart from the rest of the items in the respective lists.

This is termed as "Von-Restorff Effect"

Definition

Von Restorff Effect or Isolation Effect predicts that when multiple similar objects are present, the one which differs from the rest is most likely to be remembered.  The theory was coined by German psychiatrist and pediatrician Hedwig Von Restorff, who, in her 1933 study, found that when participants were presented with a list of categorically similar items with one distinctive, isolated item on the list, memory for the item was improved. In other words, an isolated item, in a list of otherwise similar items, would be better remembered than an item in the same relative position in a list where all items were similar.

There are many studies that demonstrate and confirm the Von- Restorff effect in children and adults and the findings suggest that elder/ older people display lesser benefits for distinctive information compared to younger people. This effect is put to good use in marketing, product promotion and advertising, where, intentionally a particular item is made to stand out and appear different from the rest of the pack (of similar items).

The Von-Restorff effect occurs when there is a difference in context (i.e., a stimulus is different from surrounding stimuli) or a difference in experience (i.e., a stimulus is different from experiences in memory).

The flip side of this effect is that, in our bid to remember the items that's different, our attention gets removed from the other items in the list, thereby resulting in remembering less, overall. Taylor & Fiske, (1978) indicated that attention is usually captured by salient, novel, surprising, or distinctive stimuli and these may be used to enhance the Von-Restorff effect.

We can benefit from the Von-Restorff Effect in many ways in our day-to-day life 

• While making lists, where a particular item (for priority reasons or some other reason) could be highlighted to make it stand out, thereby making it easier to remember it.
• During study, certain important matter/ text could be highlighted and made to stand out. This could help in better memorizing and effective revision
• In advertising and marketing, where, through a change in size, colour or shape, an item can be made to look more attractive and appealing for the potential customers
• While preparing a presentation, certain important slides can be made to stand out by making use of fonts, color, etc.  

Unit Bias

Unit Bias

Time for Reflection

If you are a fitness freak or simply a health conscious person, you would remember adhering to a specific healthy diet plan at times, where a unit/ portion was prescribed to you and then of course, there were cheat days to bite into food of your choice, maybe a pizza at times !

Did it ever happen that if a pizza slice was the recommended unit for you to consume, it didn't matter whether the pizza was medium sized or large sized. All that mattered to you was to consume just one slice (unit) of Pizza !

The above tendency is triggered by "Unit Bias". 

Lets discuss it more  

  

Definition of Unit Bias

Unit Bias is the tendency of the individual to want to finish/ complete a unit or portion of a given item, irrespective of the size of the unit/ portion. 

Andrew B. Geier and Paul Rozin developed the concept of Unit Bias in 2006 and the concept refers to the sense that a single entity (within reasonable ranges or sizes) is the appropriate amount to consume or consider. A study conducted by these three showed that participants eat more candy when served with a large spoon than when they were served with a small spoon even though they had no limits on how many spoonfuls they could have. The experiment showed that humans tend to see things as a single unit and do not take into consideration the size of the unit. Geier also suggested that people learn how big an appropriate food unit is from their culture. 

This bias has been widely researched particularly in the areas of "healthy eating" and "portion control". The individual affected with this bias is motivated by the desire to complete and this perception of completion is most satisfying to the individual. 

The bias starts impacting when the individual is just focused on finishing / completing the portion/ without any consideration to the size of the portion/ unit. Even when consuming a larger size of unit/ portion, there's no feeling of guilt whatsover even when the large size is equivalent to several units/ portions of the item.

This bias holds importance especially during these times when fitness, health and diet are on top priority for people and they adhere to strict disciplines and routines to achieve their health/ fitness goals. 

To help prevent unhealthy eating habits, it's essential to provide indicators to the individual to stop eating after a point. Segmentation and Portion Control are 2 ways to ensure limiting the quantity of item to be consumed by the individual.

 At times, even Less is More !

Trait Ascription Bias

Trait Ascription Bias

Time for Reflection

Remember confiding in someone as your "confidant" or "the secret keeper" but later discovering that everyone around was aware of the so called "secret" information/ news.  The realisation thereafter, that you would have done a better job as a "confidant" for someone as you can adapt well to the surrounding situation/ environment.

This tendency of ours to perceive ourself as a better "confidant" or "secret keeper" is an example of the presence of "Trait Ascription Bias". Let's look at it in more detail 

Definition

Trait Ascription is the tendency of the people to view themselves as relatively variable in terms of personality, behavior and mood while viewing others as much more predictable in their personal traits across different situations. 

More about Trait Ascription

This bias refers to the belief that other people's behavior are generally predictable while our own is more unpredictable. In this bias, we tend to describe our own behavior in terms of situational factors and that of other people by ascribing fixed disposition on their personality. The reason for occurrence could be because our own internal stats is more readily observable to us than the internal state of any other person. 

One of the important piece of research in this area (Trait Ascription Bias) is "the actor and the observer" by Jones and Nisbett. They argued that people are biased in how they tend to ascribe traits and dispositions to others that they would not ascribe to themselves. Their actor-observer asymmetry explains the errors that one makes when forming attributions about behavior of others. When people judge their own behavior, and they are the actor, they are more likely to attribute their actions to the particular situation than to a generalization about their personality. Yet, when an observer is explaining the behavior of another person (the actor), they are more likely to attribute this behavior to the actor's overall disposition than to situational factors. This frequent error shows the bias that people hold in their evaluations of behavior. Because people are better acquainted with the situational (external) factors affecting their own decisions, they are more likely to see their own behavior as affected by the social situation they are in. However, because the situational effects of anothers' behavior are less accessible to the observer, observers see the actor's behavior as influenced more by the actor's overall personality.

This bias is responsible for the formation of creation of stereotypes and prejudice while evaluating the personality of the other person. The bias results in a person relying heavily on "gut feeling" instead of information to ascribe traits to other people. 

Scarcity Bias

Scarcity Bias

Time for Reflection

Last Day Left

Few Days Left

Few Items Left

Special Collectibles

Limited Edition

Till Stocks Last

Once in a Lifetime Offer 

If ever, you have been tricked into buying as a result of any of the above ? If yes, then it's all because you wanted to be among the exclusive lot and not miss this great deal of being the proud owner of an "exclusive" item. This is what "Scarcity Bias" does to us ! 

Definition

"Scarcity Bias" refers to our tendency to place a higher value on objects that are scarce, and a lower value on those that are abundant. We, sort of, unconsciously assume things that are scarce as valuable and things that are abundant are not (valuable). We start associating the availability of a product with its quality.

Scarcity associated with a product or promotional offering enhances its desirability and perceived value (Brock, 1968), creating a sense of urgency (Byun & Sternquist, 2008), framing the transaction in the “loss” term (i.e., “If I don’t buy now, I will lose the opportunity”), and thus biasing decision making (Inman, Peter, & Raghubir, 1997).

Stephen Worchel, a researcher, conducted an experiment with 200 students to rate the quality of cookies of identical types. One set of students picked from a jar of 10 cookies and the other from a jar with only 2 cookies. It was found that the students preferred the more "rare" cookies and were willing to pay 11% more for them.  

More About Scarcity Bias

Whenever a person decides to purchase a "scarce" product, brain regions related to emotion gets more active and when a person decides not to purchase a "scarce" product, brain regions involved in controlled processing gets more active. The decision to purchase an item is due to the "buy it now" mentality created through a reduced activity in the brain region involved with controlled processing.This creates a sense of urgency which impacts the purchaser's cognitive ability to do a proper cost-benefit analysis, instead focusing the cognitive resources on the (symbolic) value of the product. The "emotional high" / "ego boost" that this bias gives us leads us towards this bias.  

The bias is used to great extent in marketing and advertising to lure the potential customers/ consumers and create a "buy it now" tendency in them. Those limited edition products, those few rooms left in a hotel, those few seats left in an airline are all application of Scarcity Bias in real-life.

hotels, airlines, 

Talking about the impact of  Scarcity Bias, it leads us to 

• overvalue a thing
• easily get influenced and manipulated into buying
• not pay any attention to the quality aspect
• excessive spending  
• irrational buying where the purchase is not aligned with our needs most of the times
• live a cluttered life where we tend to hoard things
• compulsive buying which may be detrimental to our mental health
• living a more materialistic life

Few ways we could mitigate the risk of Scarcity Bias are

• Do a reality check and recognise the need for the item in our life
• Identify how does buying/ possessing this thing align with my long-term goal
• Track the usage of the item to identify its real value in our life
• Imbibe Minimalism, Essentialism 
• Revisit our belief system and perception about Scarcity
• Better personal financial planning could help reduce the tendency to fall prey to the bias
• Focus on Holistic well-being, giving sufficient focus to non-materialistic aspects of our personality/ life also. 

Scarcity = Rarity + Value

Restraint Bias

Restraint Bias

Time for Reflection 

Ever fell prey to a temptation that you thought you could resist ?

Ever made a resolution (new year or otherwise) to get rid of an addictive or compulsive behavior but gave up your efforts when it proved too much for you ?

Ever tried testing your will power on something you were confident of accomplishing, but fell short ?

Life is full of temptations and urges and we come across many of them in our daily life. Many a times, we tend to miscalculate our ability to resist the temptation/ challenge and this is what indicates the presence of  "Restraint Bias" in us, as in the case of above cited scenarios.

About Restraint Bias

Restraint Bias is defined as the tendency of the people to overestimate their capacity for impulse control. Various studies have examined how our beliefs regarding our ability to regulate visceral impulses influence our self-control process. Inflated impulse-control beliefs led people to overexpose themselves to temptation, thereby promoting impulsive behavior.

Loran Nordgren from Northwestern University performed a series of four experiments to show the presence of "restraint bias" in people and also demonstrated that those who feel invulnerable fall prey to this bias most strongly and are more likely to face tempting situations.

The bias leads us into taking decision that increase our exposure to temptations and urges, and, thus, increase our probability to succumb to these temptations and urges. The bias also offers unique insight into how erroneous beliefs about self-restraint promote impulsive behavior. The bias is quite evident in people suffering from addiction, who tend to overestimate their ability to control urges, find themselves facing a bigger temptation/ urge and in the end fall for it.

The cause of Restraint Bias is our inability to correctly predict the future and our feelings and behavior in circumstances that are different from the current one.

The bias impacts exposes us to more temptation and increased impulsiveness. It also impacts our decision-making and our over-inflated ego leads to denting our self-esteem badly. 

Taming a bigger temptation/ urge takes time and practice ! 

Quality Consciousness Bias

Quality Consciousness Bias

Time for Reflection

Has there been times when you lost out on an opportunity because you abandoned/ delayed taking a decision as you were not sure about the quality of the process/ product ?

Maybe - that project proposal, that idea you always wanted to put across to your boss/ management, that opinion you wanted to give. Well, the list goes on and we can cite "n" number of scenarios for this. These scenarios get manifested because of "Quality Consciousness" bias. Let's discuss more about the same

About "Quality Consciousness" Bias 

"Quality Consciousness" bias refers to our tendency to defer or abandon decision-taking because we are unsure about the quality of the process/ product.

Maintaining quality is crucial for success, whether at an individual level or business level but many a times in our life, we lose out on opportunities just for the reason that we were not okay with the quality, resulting in stalling of projects, assignments and also in stagnancy (stuck and unable to move). 

The more the responsibility on us, the more quality conscious we get because a lot is put at stake - our credibility, our survival, our growth and more.  

The bias may occur because of 

• non-adherence to certain identified standards and specification
• inability to recognise the exact area and aspect - whether the issue lies at the product/ service/ task level or in the decision-making process.
• lack of requisite knowledge about the quality aspect in the related context
• tendency to ensure 100% even when it is not required 
• reliance on single interpretation of quality i.e. self or an expert

The bias impacts in some of the following ways

• results in delays and cancellation of projects, assignments but also
• impacts the self-confidence and self-esteem of the person. 
• puts undue stress on the person, resulting in procrastination and inaction

 

Some of the ways, the risks of Quality Consciousness could be mitigated are by 

• Using an established framework for decision-making to ensure rationality in the process
• Awareness and Knowledge about the quality benchmarks related to the product
• Follow the SOP (Standard Operating Procedures) if the context is a task
• Focus on ensuring progress instead of undesirable quality 
• Involve/ Engage a 3rd party to ensure quality monitoring

Projection Bias

Projection Bias

Time for Reflection

When you look around at your possessions, are you able to identify items (gadgets, books, accessories, etc.) bought purely on instinct and not used since bought ? 

Recollect those discussion sessions, meetings, presentations, brainstorming when you assumed that all others involved in the process would align with your opinion, belief, thought process because of the idiosyncratic nature of your opinion !

Remember the time when you went on binge-shopping assuming you would need it all in future !

There are plenty of other similar scenarios such as our saving habits, fitness routine(exercising), getting-in/ moving-out of a relationship, where our future need get defined by our current needs and where we overestimated the normality of our belief/ opinion/ decision and expected others around to comply with it. These scenarios are very typical of a bias referred to as "Projection Bias". Let's explore this bias in more depth     

Definition and Background

"Projection Bias" is the tendency to project current preferences into the future as if future tastes will match current ones (Loewenstein, O'Donoghue, and Rabin 2003). The bias refers to our estimation of ourselves, where we tend to assume that our current tastes and preferences to continue in future too. We, somehow, underestimate the magnitude of change and believe that the way we think, feel and act now is the way we would do in future too. 

Projection Bias also refers to our tendency to overestimate the degree to which other people agree with us which could be in terms of the way we think or the way we work. 

So, Projection Bias refers to the following 2 aspects 

• Typicality or Normality of our behaviour when comparing with others
• Estimation of our future selves

The Projection Bias leads to the presence of "empathy gap", a situation where we tend to put our future selves in the same emotional state as our current self. This means that decisions related to our future are entirely based on out "emotional state" right now, in the present.

(An "empathy gap" is the inability to predict our behaviour from a calm and cool emotional state to a tempting hot emotional state)

The term "Projection Bias" was first introduced in the 2003 paper titled "Projection Bias in Predicting Future Utility" by Loewenstein, O'Donoghue and Rabin.

Why/ How does Projection Bias occur ?

The Project Bias occurs because of our current emotional state forming an "anchoring point" for our future emotional state. This implies that all decisions related to our future self are done with reference to this "anchoring point". The thoughts, feelings and behaviour of our future state are determined by

how/ what they are currently (in our current state).

Another reason for the bias to occur is because of our assumption that our beliefs, feelings and behaviours are accurate and appropriate and so shared by all, be it our future self or by people around us.    

According to Loewenstein and team, "Projection Bias" can happen when people make status-based decision that cause them to compare themselves to a different group of peers

Some of the triggers of Projection Bias are

• Hunger and Craving
• Overestimation of self, leading to Overconfidence
• Falling trap to impulsive buying

More about Projection Bias

Projection Bias is visible in many areas of our life such as 

• Car/ Vehicle Market 
• Housing Market
• Healthcare
• Financial Investment
• Consumerism
• Insurance

Just to elaborate on the above, there's a seasonal surge in the purchase of Cars and Houses. People tend to buy cars and houses, consistent with the weather conditions. In case of Healthcare, people tend to ignore opting for regular medical check-up if they are healthy currently. Another elaboration could be on Consumerism, where again people tend to go in for compulsive buying assuming the future weather conditions would remain consistent with how they are at present (currently). Likewise, similar examples exist for the other areas in the above list like Financial Investment and Insurance.

Projection Bias leads to many issue, some of which are

• focus only on short-term planning
• missing the big/ whole picture
• leading to obsessive behaviour
• insulated decision-making

The following are few methods/ techniques to mitigate the risks of Projection Bias

• Get rid of assumption and rely more on objectivity during decision-making
• Practice Visioning exercise to help clarify/ establish goals and destination  
• Mood Management, especially during decision-making to avoid irrational decision-making
• Practice Visualisation which helps provide details and insight into the future, ensuring that future is seen more from one's ambition and purpose in life than current situation. 
• Breaking the habit formation pattern for areas impacted by Projection Bias

Change is the only constant. Let our "Beliefs, Tastes and Preferences" embrace it (Change) too !