You have made it to week 2 of 2023! How have you been settling so far? New beginnings can be nerve-wracking and exciting at the same time. Although we do not literally get to start on a brand new page, the start of the new year signifies the renewal of one’s motivation and having another go at achieving new and existing goals. Similar to how companies review their end-of-year goals and set new goals for this new year, it is a great time for one to review their own goals. During this hopeful time, while thinking about the big things that one wants to achieve, it is crucial that one does not fall trap to cognitive biases that may result in the setting of unrealistic expectations and goals. In this article, we hope to introduce some common cognitive biases that one uses and how they can affect decision-making.
Uses of cognitive biases
As human beings, we make many decisions throughout our day. Whether at work or at home, there are many decisions to be made for our day to go on. Have you noticed that there were some decisions that were made faster while others would take a longer time? Well, our brains have developed shortcuts to simplify information processing which allows us to absorb large amounts of information and make decisions quickly. However, the increase in speed does come with flaws. Depending on the content, one’s memory of an event can be biased due to the way one remembers. Other biases can occur depending on what the individual was paying attention to. The following are some common cognitive biases one may fall trap to.
Examples of common cognitive bias
Confirmation bias. Individuals may find evidence to support their hypothesis rather than pieces of evidence that may disprove what they think. They may react defensively if the information contradicts their belief. For example, when one is interested in another person, it is more likely for them to take note of information that puts this person in a positive light and ignore those that puts the person in a negative light.
Anchoring bias. One may base their perspectives and beliefs based on the first piece of information they come across. Rather than researching and finding more information, they would use the existing information as a gauge. As such, these individuals may be misinformed and could possibly have unrealistic expectations.
Overconfidence. As its name suggests, one may routinely rate themselves higher in aspects like physical attractiveness, likeability, intelligence, and morality. Interestingly, overconfidence is often observed among the unskilled or people who may lack knowledge in the topic. It has been hypothesized that the lack of knowledge is exactly the reason for one’s overconfidence as they do not know enough to know how wrong they may be.
Underconfidence. The opposite of overconfidence, underconfidence is when one tends to rate themselves lower than what they may be. It is often observed in women and other underrepresented minorities. For example, these groups tend to have a lack of confidence in their abilities to perform in domains like science, engineering, and mathematics. In some cases, underconfidence may be a result of one’s past experiences.
Gambler’s fallacy. Individuals believe that random events are less or more likely to happen due to the outcome of the event(s) that has already occurred. For example, when tossing a coin, one may believe that if the first toss was head, it is more likely that the second toss would be tails. However, each coin toss is independent of the ones before. It would still have a 50-50 chance of head or tails. The results of the toss before do not affect the toss now. Similarly, events in life may not necessarily be related to each other. When one event does not go according to plan, it does not mean that the next event is more or less likely to fail.
These common cognitive bases can easily lead us to make unrealistic goals or make misinformed decisions. As one evaluates their goals and plan for new ones, there is a need to be aware of possible biases. A quick way to know if your decisions have been influenced by these biases is to understand the reasons for making these decisions. Furthermore, to prevent these cognitive biases from influencing your choice, actively challenge your biases to make a more informed choice.
Interesting reads
https://www.onlinecasinoground.nl/wp-content/uploads/2018/12/Decision-Making-and-Cognitive-Biases-EhrlingerReadingerKim2015.pdf