Most people don't think of themselves as more biased than other people and tend to think they base their decisions on facts, but most people would be surprised.

Here are 12 ways cognitive biases can affect our everyday decisions.

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1 - Anchoring Bias

We humans usually rely on the first information we receive no matter how reliable that piece of information is when we make decisions. The very first piece of information has tremendous effect on our brain.

For instance, I want to sell you a car and you are interested in buying it. Let's say you ask me what the price is and I tell you it's $30,000. Now, if you come back a week later and I say I'll sell it to you for $20,000, this seems like a new, very cheap price to you, right? Your judgment is based on the original information that you got which was $30,000. You feel like you're getting a great deal.

But let's say the first time that you asked I said $10,000 and you come back the next week and I tell you I'm going to sell it to you for $20,000. Now it doesn't look like a very good deal because of the anchoring bias.

Another example is trees. What if I asked you if the tallest tree in the world was higher or lower that 1200 feet? And if so, how tall?

This same effect occurs if I ask you to guess out of thin air instead of giving you an anchor of 1200 feet. The results are crazy.

2 - Availability Heuristic Bias

People overestimate the importance of information that they have. Let me give you an example here.

Some people think that terrorism is the biggest threat to the United States because that's what they see on TV. The news always talks about it and because of that it inflates the perceived dangers.

But if you look at the real perspectives, television cause 55 times more deaths than terrorism. Yes, TV's literally fall on people and kill them 55 times more often than terrorism.

You're more likely to be killed by a cow than a terrorist according to the Consumer Products Safety Commission. You're more likely to die from a coconut falling on your head and killing you than a terrorist attack.

Even the police that are hired to protect you from terrorist are more dangerous. It's estimated that you are 130 times more likely to be killed by police than by a terrorist.

People do not make their decisions based on facts and statistics, but usually they make them based on news and stories and things they hear from other people. It's much scarier to die from a terrorist attack than a falling coconut and because of this the news won't cover it because there's not much money in it.

3 - Bandwagon Effect

People do or believe in something not because they actuall believe it but because that's what the rest of the world believes in. In other words, following the rest without thinking.

If you've ever heard the words, "If your friends jump off a bridge, would you?", then that someone is accusing you of the bandwagon effect.

It happens a lot with us. Many people vote for a certain candidate in an election because they're the most popular or becasue they want to be part of the majority.

It happens a lot in the stock market too. If someone starts buying a stock because they think it's going to rise then a lot of other people are going to start picking the stock as well.

It can also happen during meetings. If everyone agrees on something, you are more likely to agree with them on that point. In management, the opposite of this is called group think and it's something companies try very hard to deter because if 9 out of 10 people agree on something and the last person doesn't and won't speak up, it could squelch a great idea.

4 - Choice Supported Bias

People have a tendency to defend themselves because it was their choice. They think just because they made a choice it must be right.

For example, let's say a person buys an Apple product. Let's say it's a Mac Book instead of a Windows PC. They are more likely to ignore the downsides and faults of the Apple computer while pointing out the downsides of the PC.

They are more likely to notice the advantages of the Apple computer and not the Windows computer. Why would someone point out that they made a bad decision?

Let's say you have a dog and you think it's awesome because it's your dog, although it might poop on the floor every now and then.

The same goes for political candidates. Not the pooping part, but they both may suck. One of the lesser of two evils may be more right in your mind because you voted for them.

5 - Confirmation Bias

We tend to listen to information that confirms what we already know. We even interpret the information that we receive in a way that conforms the current information that we already have.

Let's say that your friend believes that sweets are unhealthy. This is generally a pretty broad belief. You will only focus on the information that confirms what we already know. They're more likely to click on videos that confirm that belief or read articles that support their argument. They won't even search for "positive health effects of eating a bowl of ice cream", no, they will instinctively search for, "how bad is sugar".

The confirmation bias is a very dangerous in scientific situations and is actually on of the most widely committed cognitive biases.

6 - Ostrich Bias

This is a decision, or rather subconscious decision, to ignore the negative information. It may also be an indication we may only want to consider the positive aspects of something.

This goes beyond our only looking for the positive information, but this is when there is negative information and we choose to ignore it as a factor in our decision-making process.

Sometimes, even when we have a problem we try to ignore it thinking it will go away.

Let's say you have an assignment to do. It's not something that you really want to do so you may keep on procrastinating because your mind will think that it will just go away or is solved by ignoring it.

Smokers know it's bad for their health but a lot of them keep ignoring the negative implications of cigarettes thinking it will not damage them or they might stop before anything serious will happen.

To avoid finding out negative information we just stop looking for it and this can be a serious crime in many scientific research laboratories and basically promotes ignorance.

7 - Outcome Bias

We tend to judge the efficacy of a decision based primarily on how things turn out. after a decision is made we rarely examine the condition that existed at the time of the decision, choosing instead to evaluate performance mostly on whether the end result was positive or not.

You decide on whether a certain action is right or wrong based on the outcome. This goes hand-in-hand with the hindsight bias.

Let's say there's a manager who wants to make a decision. His team and the data are telling him to make one decision but his gut is telling him to make another decision.

Well, he goes ahead and makes the decision that his gut told him to do and in the end it was the right decision.

Does that mean it's better to trust your gut rather than listen to your team who are advising based on facts and statistics?

That's what the outcome bias is. You take the decision and base the effectiveness of your decision based on the outcome, even if it was luck.

Now, this is bad logical thinking and may actually lead you to ruin thinking and bad outcomes in the long run.

8 - Overconfidence

Sometimes you get too confident in making decisions not based on facts, but based on your opinion or gut, because you have been right so many times in the past.

For example, you're a stock trader and you pick five stocks and in a couple years all of them turn out to be successful or profitable.

It increases your confidence to a point to where you start believing that whatever stocks you pick will be successful.

It's quite dangerous because you might stop looking at the facts and solely rely on your opinion. Just because you flipped a coin and it landed on heads doesn't mean that the next time will land on heads too.

Ego Is The Enemy is a great book on this bias or you can research the Gambler's Fallacy.

9 - Placebo Bias

When you believe that something will have a certain effect on you then it will actually cause that effect.

For instance, you're sick and the doctor gives you a certain medicine. Even if that medicine does not actually help you, you believe that it will help you and it actually causes you to recover quicker.

This might not sound very logical but dozens of experiments have actually proven this. That's why positive affirmative people usually have a positive life and visa versa.

The way you think is super important and a lot of personal development books say that if you really believe something you will eventually find a way to achieve it.

The placebo bias can truly give you the motivation you need and is not always a bad thing. The mind will believe what you want it to believe and can use the placebo bias to your advantage if you use it wisely.

10 - Survivorship Bias

This bias is when you are judging something based on the surviving information. Let me give you and example.

There's a lot of articles titled like, "5 Things Millionaires Do Every Morning" Does that mean doing those things every morning will make you a millionaire? No. There's lots of people who did them and didn't become a millionaire but there's also people who did them and did become a millionaire.

So, these articles are primarily based on the ones who survived and reject all the others who did the same thing but did not become millionaires.

Another example is to say that buildings in an ancient city were built using extreme engineering because they lasted so long. This is a bad conclusion because you are not considering what ratio of buildings were built to how many that lasted. You're only seeing the ones that lasted thousands of years of weathering when the other 98% have already washed away.

It's hard to know what you don't know.

11 - Selective Perception Bias

Selective perception is a form of bias that causes people to perceive messages and actions according to their frame of reference. Using selective perception people tend to overlook and forget data that contradicts their beliefs or expectations.

Let's say, for example, you're a smoker and you're a fan of soccer. You're more likely to ignore all the negative advertising about cigarettes because since you're already smoking, you have this perception that it's ok to smoke.

But if there's an advertisement about soccer you're more likely to notice it because you have a very positive perception about it. This is something really interesting and has to do with how you perceive the world due to your unconscious mind and what it filters out.

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12 - Blind Spot Bias

If I asked you how biased you are you would probably say that you are less biased than the average person and you're more likely to base your judgment on facts and statistics. That's what's known as the blind spot bias or the bias bias. You are biased because you think you are less biased than everyone else.

For example, imagine I Gifted something to my teacher and the next day she gave me a good grade on a test. If you asked her whether she was biased by receiving a gift from me when she gave me that grade the answer would be that the gift never affected her decision when marking my paper, but if you asked her if other teachers are biased when students give them gifts she will say yes, in most cases. That's the blind spot bias.

Hope you enjoyed reading this post and it helped you understand the many different biases we have that we many not be aware of.

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