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17 Common Cognitive
Biases That Stop You
From Thinking Clearly
Jorge in entrepreneurship, Leadership, Psychology 0 Shares " # $ % &

A top skill to have, which requires a lot of work, is clear thinking. And the work
required to have clarity of thought requires awareness of what impedes it in
the first place. Those impediments are called cognitive biases, which are
thinking shortcuts we use to make big and small decisions. We all have them,
nobody is immune to them.

I recenlty read Jennifer Clinehens’ book, How to Solve Impossible Problems: A

guide to the thinking tools of CEOs, philosophers, inventors, and billionaires.
It’s a gem of a book, and the first section is about cognitive biases. Why?
Because you have to become aware of, and combat, thinking biases to become
a better thinker and problem solver.

There isn’t a set number of cognitive biases, there are many, below are 17
common cognitive biases that stop all of us from thinking clearly:

1. Affect Heuristic
2. Halo Effect
3. Groupthink
4. Sunk Cost Fallacy
5. Overconfidence Bias
6. Confirmation Bias
7. Dunning-Kruger Effect
8. Optimism Bias
9. Cashless Effect
10. Self-Serving Bias
11. FOMO
12. Gambler’s Fallacy
13. Actor-Observer Bias
14. Survivorship Bias
15. Anchoring Bias
16. Hyperbolic Discounting
17. Planning Fallacy

1. Affect Heuristic
This is the tendency for people to make a decision based on their emotional
state. For example, if you associate the concept of innovation with something
positive, you’re more likely to judge a new project as being lower risk.

To avoid this bias, ask yourself:

Have I fallen in love with this idea?

Are my emotions outweighing my ration mind?
Have I interrogated my emotional state and feeling about this decision?

2. Halo Effect
The tendency for people to let one positive trait guide their total opinion of a
person, product, or experience. For example, studies have shown that we
consider good-looking individuals more intelligent, more successful, and
more popular than less good looking peers.

To avoid this bias, ask yourself:

What do I really like about this [person/place/idea]?

Do I feel the same way if I imagine this [person/place/idea] without their
“halo” trait?

3. Groupthink
The tendency for people in a group to make irrational decisions because they’d
rather go along with a group than to debate a decision and risk being labelled
as dissenting.

To avoid this bias, ask yourself:

Am I getting on board with this idea just to get along with the group?
What would the ramifications be if I disagreed with the group?

4. Sunk Cost Fallacy

The tendency for people to keep pursuing a bad idea because they don’t want
to lose the time and money they’ve already invested in it. This fallacy is often
described as “throwing good money after bad.”

To avoid this bias, ask yourself:

Am I emotionally attached to the work I’ve already done?

If I was an outsider observing the project right now, would I suggest that
we kill it or keep going?
What’s the worst thing that could happen if I cut my losses and abandon
this project?

5. OverconLdence Bias
The tendency for people to let subjective confidence in their own abilities
outweigh the objective accuracy of a choice. This is especially true of a topic
with which you’re unfamiliar. As scientist Nicholaus Copernicus put it: “To
know that we know what we know, and that we do not know what we do not
know, that is true knowledge.”

To avoid this bias, ask yourself:

How informed am I in this field?

On a scale of 0% to 100%, how sure am I that I’m right?
Would I make the same decision if I was 20% less certain of this choice?

6. ConLrmation Bias
Peoples’ tendency to search for, interpret, favor, and remember information
that confirms their preexisting choices and beliefs. As author Harper Lee put
it, “People generally see what they look for and hear what they listen for.”

To avoid this bias, ask yourself:

Have I sought out conflicting information about my belief?

Do I get emotional when defending my position, or do I have a rational
perspective?

7. Dunning-Kruger
Effect The tendency for unskilled people to overestimate their ability to be
successful at a task. They lack the self-awareness to objectively measure their
competence.

To avoid this bias, ask yourself:

How new am I to this topic?

Am I truly an expert?
How confident do I feel about this decision?
Is there an expert I can lean on to vet this idea, solution, or decision?

8. Optimism Bias
The tendency for people to think they’re less likely to experience something
negative or fail.

To avoid this bias, ask yourself:

Am I understanding the riskiness of this situation?

Have I planned for failure, just in case?
What’s the worst thing that could happen if I fail?

9. Cashless Effect
The tendency for people to spend more money when they use credit or debit
cards, as opposed to cash. In other words, the more tangible payments are, the
more psychologically painful it is for customers to spend.

To avoid this bias, ask yourself:

Visualize how you’d feel about buying a specific item if you had to go
down to an ATM, get out cash, and then physically trade that cash for a
product. After doing this exercise, examine your feelings. Are you more or
less willing to buy this product?

10. Self-Serving Bias

This is the tendency for people to protect their ego and self-esteem. It often
takes the form of “cherry-picking” feedback to support your high opinion of
yourself or overlooking your own faults and failures. You might be dismissing
good feedback because you don’t want to bruise your ego.

To avoid this bias, ask yourself:

Have I been given a piece of feedback repeatedly, that I’m ignoring

because I believe it doesn’t apply to me?

11. FOMO (Fear of Missing Out)

This is a form of social anxiety that makes people scared they’re being left out
of exciting or interesting events. It can be triggered by posts on social media,
where it looks like everyone is having fun without you.

To avoid this bias, ask yourself:

Do I feel left out of an invisible ‘in-crowd’?

Am I doing something because I want to, or because I’ll feel left out if I
don’t?

12. Gambler’s Fallacy

This principle describes peoples’ tendency to think a random event is less
likely to happen in the future if it’s happened in the past. For example, if I flip
a coin that lands on heads 100 times in a row, most people assume it will land
on tails next. But actually, each new flip is independent of what’s happened in
the past.

To avoid this bias, ask yourself:

Is this event dependent or independent from past outcomes? In other

words, am I judging a random event by unrelated historical events?
If I didn’t know anything about past performance, would I still make the
same choice?”

13. Actor-Observer Bias

This is the tendency for people to attribute their own failures to external
reasons, and others failures to internal causes. For example, when you’re late,
it’s because there was too much traffic. But you assume that Jane was late
because she is disorganized.

To avoid this bias, ask yourself:

Am I making assumptions about other peoples’ failings?

Have I let myself off the hook for bad behavior one too many times, while
being tough on your colleagues, friends, or family members’ failings?

14. Survivorship Bias

This describes the mental error of only concentrating on the projects or people
that have been successful, and overlooking those that failed when analyzing
what made something a success. A famous example of Survivorship Bias in
action comes from military history. During World War II, statistician Abraham
Wald was working for the U.S. military to try and figure out where planes
should have their armor reinforced, in order to avoid getting shot down. The
military’s initial efforts weren’t as succesful as they’d like, and Wald knew
why. The military had decided to only reinforce those areas where planes had
been shot. But the problem was, they were only seeing planes that had
returned. In other words, where these planes had been hit was survivorable
damage, because they’d flown home. The planes who’d crashed hadn’t
returned and therefore hadn’t brought back data about the places where the
damage proved fatal. Wald proposed that the military reinforce the areas
where the surviving planes had not been shot, as those were the places where
downed planes had been damaged. Wald’s brilliant observation was correct,
and saved many planes from a crash landing.

To avoid this bias, ask yourself:

When I look back to see what’s gone right, have I also looked at what’s
gone wrong?
Am I accounting for the features, tendencies or characteristics of failure as
well as success?
What features or choices do success and failure have in common?

15. Anchoring
This is the tendency for people to use the first piece of information they see to
judge the following information. For instance, if you see two bottles of wine —
the first one you see costs $2000 and the second costs $200 — you’re less
likely to think of the second bottle as expensive because you anchored to
$2000 as the cost of a bottle of wine.

To avoid this bias, ask yourself:

In what context did I see this product and its price?

Is the company making an effort to anchor me against something more
expensive, to cloud my judgment?

16. Hyperbolic Discounting

This is the tendency for people value immediate rewards like sleeping in, over
long-term rewards like being fit19. This means people have to outwit their
own psychology in order to get in a workout or achieve other goals.

To avoid this bias, ask yourself:

What tends to win in my mind — the here and now or the longterm
benefits?
Which is more important to me in the long run — comfort or this goal?
Hint: Picture yourself in 10 years — are you better off for having
prioritized the bigger picture?

17. Planning Fallacy

This is the tendency for people to underestimate how much time it will take to
complete a future task20. In other words, people aren’t realistic about their
timelines.

To avoid this bias, ask yourself:

How much time did this project take last time?

Have I accounted for delays and setbacks that I can’t yet anticipate?

Bottom line: Biases drive our thinking, nobody is immune to them. Becoming
aware of them, and combat, is key if you aim to think more clearly and solve
problems.

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Written by Jorge in entrepreneurship, Leadership, Psychology on Feb 17, 2022

Tagged cognitive biases, Decision making, psychology.

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