Bias in Decision-Making
People mostly tend to think they are right when they try to uphold an idea. We like to think that our decision is the best one, and it gets hard to decide objectively. The human brain is powerful but subject to limitations. These cognitive biases are generally the results of our brain’s effort to simplify data processing. Experts define cognitive bias as the tendency to make decisions in an accidentally irrational way. Bias in decision-making can occur both while we try to make quick decisions or when the process is spread on a long period.
Cognitive biases in decision-making were first developed in the early 1970s by psychologists Amos Tversky and Daniel Kahneman. Their interpretation of the term can be defined as a set of predictable mental errors. These errors, they think, result from our limited ability to process information objectively as we can easily be effected by the people around us, our experiences, retentions, etc. Especially in subjects where our emotions are more involved, the fact that people try to process the information slowly or faster can cause biases in thinking. This situation can lead you to misjudge risks and threads. Briefly our values, memories, socialization, and other personal attributes can cause biases in decision-making.
To summarize, bias in decision-making is described as a systematic error in thinking that occurs when people are processing information around them. This affects the decisions and judgments and drags them into risky situations.
Some of these biases are related to memory, and some are related to attention problems. The way you remember things may be biased for some reason, preventing you from deciding objectively. Similarly, when you don’t pay attention to what you focus on, it will be hard for you to make the right decision.
Now that we know what a bias is in decision-making, it is time to move on to the signs of it. What do you think can reveal your biased decision-making attitude? Let’s take a closer look!
Signs of Biased Decision-Making
It is mostly not difficult to understand if someone shows biases in their decision-making process. Everyone exhibits biased decision-making. It might be easier to spot it in some people, while it is hard in others. The point is to know that it affects our way of thinking. Here are some signs that you might be influenced by some types of cognitive biases:
- Focusing only on the news that supports your ideas.
- Blaming events and people around you when things go wrong.
- Taking personal credit for accomplishments and attributing others’ successes to luck.
- Thinking that everyone accepts your opinions.
- Assuming that you know a lot about a topic without searching adequately.
When you behave and think like that (mostly unknowingly), almost all your judgments and decisions would be biased and partial. Assuming that you are rational, impartial, and capable of measuring the information available to you makes you feel good. However, you forget something. Your biased decision-making can lead to poor judgment, and if not prevented, can lead to possible risks that may occur around you and even to corporate threads due to your business decisions.
Types of Bias in Decision-Making
There are many types of bias in decision-making as we may be influenced by many concepts and situations in the world we live in. Confirmation bias, overconfidence bias, anchoring bias, and availability bias are the ones we will examine in this article.
Confirmation Bias in Decision-Making
In confirmation bias in decision-making, our existing beliefs and thoughts are the starring characters. They create a great tendency to focus on evidence that best fits. Whereas the rational decision-making process assumes that the information is gathered objectively. For example, two people argue on how an ideal child education should be, and all they both do is try to back their ideas with scientific papers and proof. However, if only they discussed the context in-depth, it would be more than enough for them to arrive at a satisfactory result. Briefly, confirmation bias favors the information that confirms your existing beliefs and ideas. That’s why you tend to find an early evidence to back it up without comprehensively searching for it.
Anchoring Bias in Decision-Making
Anchoring bias in decision making occurs when you focus too much on the first piece of information you find. For example, you want to buy a car. Without conducting a deep search, you decide that the average price for this car is a certain value, and any amount below that is the perfect deal. This can lead you to make poor decisions, and even to be cheated sometimes.
Availability Bias in Decision-Making
Sometimes, you find yourself deciding on something very quickly. This is mostly because of the attitude of availability bias in decision making. Availability bias places an immense value on information that comes to your mind quickly. Once you are haunted by this quick idea, the probability and likelihood of the same things will seem to happen in the future. For instance, say that you’ve had a car crash recently. And since then, you’ve been afraid of driving in traffic. This is because you think that you’ll have an accident once you start to drive again even if the statistics that tell opposite. However, this information doesn’t speak to us at that moment, as a result of availability bias in thinking.
Overconfidence Bias in Decision-Making
Overconfidence bias in decision-making happens when you give so much faith in your knowledge. You probably think that your contribution is way more valuable than it actually is. If you act like this, it means that you have an unrealistic view of your own decision-making ability. Generally, entrepreneurs are more likely to show overconfidence bias in thinking as they fail to spot the limits to their knowledge. As a result, they cannot perceive risks and make poor judgments. This is not true for all entrepreneurs, but many can fall into this trap.
Tips & Tricks: How to Reduce Bias in Decision-Making
Debiasing and cognitive education can help minimize biases in decision-making. 2 tips and tricks on how to reduce bias in decision-making include:
- The Awareness of the Tendency: When you are aware of the bias you show in your decision-making process, you start to think differently. Learn about common types of biases and try to catch them in other people’s talks and ideas. The more you practice, the more you will be aware of this.
- Challenging the Bias: After you notice the tendency in your thinking, you need to focus on challenging it. Ask yourself if you are giving too much importance to some factors or ignoring relevant information just because it doesn’t support your view. Thinking about these questions can make you a better critical thinker purified from biases.
