Tag Archives: Confirmation Bias

The Most Common Biases in Business Decisions

If you’ve been following me for any length of time, you’ll know that one of topics that I write about the most is cognitive biases. So, when I came across an article on the Harvard Business Review that neatly wrapped up some of the more common biases in business decisions, I just had to comment on it.

I agree with just about everything in this table (?), but I’m surprised about one thing: the endowment effect. That is, I’m surprised it’s not listed in the table. Specifically, listed under ‘stability biases’ as this is where it would fit. To refresh your memory:

In short, it means that people want more money for something than they’d be willing to pay for it. Put differently: we overvalue that which we own. You could think of a simple example of this through the course of a negotiation. When negotiation with someone, we’ll probably overvalue what we bring to the table. Someone may offer you $50 for your 25-year old keyboard (piano), but you think it’s worth at least $75. Barring any outside appraisal, the endowment effect is likely at play here.

Given the number of deal-making that takes place on a regular basis, I’m surprised that we didn’t see this as part of the table. It seems to me that in business, when money is often the thing that’s held in the highest regard (for better or for worse), you’d want to have people with the decision-making power understand that they may be overvaluing what’s theirs.

Upon further reflection, I can understand why one may not see it as a “common” bias because in today’s society, (at least in Western cultures), the common transaction is cash for stuff and not stuff for stuff (barter). If bartering were more the name of the game, then I would certainly want to see the endowment effect on that list. Either way, though, it’s certainly worth remembering that we tend to overvalue the stuff we have.

The Confirmation Bias in Action: “When I Looked Closer, It’s Obvious I’m Right”

Decision-making biases are challenging, to say the least. Often times, we don’t know that they’re affecting our ability to make logical and rational decisions. The first step in combating these biases is knowing what they are. The next step would then be identifying when we use these biases. On that note, I came across a funny comic that perfectly illustrated the confirmation bias in action.

The confirmation bias is just dripping from this comic. It might not always be easy to see when we’re operating under the confirmation bias, but “luckily,” we might have an easier time of seeing it in someone else.

A couple of years ago, I offered some other ways for combating the confirmation bias (once you know that it’s a thing). One of these ways is a two-pronged approach: seeking out contradictory information. It may sound easy to go out and look for information that doesn’t conform to your opinion, but it can actually be quite difficult. The difficulty is amplified by the fact that much of our social media sites are doing their best to show us content that conforms to our beliefs and opinions (in part because that’s what they think we want). As a result, it *might* be easier to seek out people with contradictory opinions.

When you’re trying to combat the confirmation bias by being exposed to different information, seeking out a person with a contradictory opinion is usually superior to seeking out contradictory information. Why? Because the person can engage with you and refute the things you might mutter under your breath as you’re reading the contradictory information. Essentially, you’d be engaging in the Socratic method.

If seeking out someone with a contradictory opinion sounds interesting to you, I’d encourage you to find someone who’s aware that you’re trying to combat your own confirmation bias. That is, you don’t want your first experience in this regard to be with someone who’s going to screech at you that your ideas are crazy.

How Smartphones Can Lead to Better Parents

Over three years ago, I wrote a post about cell phone etiquette. At the time I wrote that, I wouldn’t have guessed that three years later, I’d be considering the possibility that smartphones could actually lead to better parents.

But that’s exactly what this post is about.

The stereotype goes that many parents will bring their children to the park (and/or some activity) and upon arriving, they shoo away their children only to peer down at their cell phone. Some folks do this while out to dinner with friends (even though they don’t have kids, see here). Many will cringe upon seeing parents sitting on the bench enwrapped in the goings on of their cell phone. Farhad Manjoo, however, points out how smartphones can actually make for more available parents [Emphasis Added]:

But we rarely consider how, by liberating us from the office, smartphones have greatly expanded the opportunity for certain kinds of workers to increase their involvement in their children’s lives. Because you can work from anywhere thanks to your phone, you can be present and at least partly attentive to your children in scenarios where, in the past, you’d have had to be totally absent. Even though my son had to yell for my attention once when I was fixed to my phone, if I didn’t have that phone, I would almost certainly not have been able to be with him that day — or at any one of numerous school events or extracurricular activities. I would have been in an office. And he would have been with a caretaker.

Stop and consider that for a moment: having a smartphone can actually make you more available as a parent. Now, this isn’t a commercial for smartphones, but it’s certainly something that should give you pause for consideration. I know it did for me when I read it. This idea put forth from Manjoo is exactly the kind of thing that I’m talking about when I say putting a new perspective on things. Someone who is so focused on how smartphones are bad for parents and how they keep parents from their children wouldn’t be able to see the possibility that for a small population, having a smartphone can actually allow a parent to be away from the office and with their children.

This idea isn’t meant to invalidate the idea that smartphones are changing the relationship we have with our children, but the idea that smartphones are allowing us to be with our children more is, to be hyperbolic for a moment, paradigm-altering. A key step to being a better parent is being able to be with your children. So, if smartphones can get us out of the office and next to our kids, isn’t that an important step?

~

There still might be some of you out there that unequivocally think we shouldn’t be on our phones when we’re with our kids and that’s okay, but I hope that you’ll at least consider (reflect, think about, ponder, etc.) the possibility that the opposite may be true. It’ll put you one step closer to defending against the confirmation bias.

“Julia Lost on Jeopardy Because I Watched Live”

A few weeks ago, there was a contestant on Jeopardy that made quite a run. She didn’t break any of Ken Jennings’ records, but she certainly set a few records for females on Jeopardy. In fact, Julia Collins now has the record for the longest winning streak by a woman (and also the second longest winning streak — male or female) and the woman to have won the most money on Jeopardy. As it happens, I was lucky enough to see every episode.

Earlier this year, my son was born and one of the ways that helps him to sleep is if I bounce on an exercise ball. Since this can happen at odd hours of the day, I started watching DVR’d episodes of Jeopardy. In fact, I remember the first game that Julia won because she had to beat a Canadian. Anyway, over the course of 5 weeks, I continued to watch Julia handily defeat her competition and then when it was interrupted for the Jeopardy Battle of the Decades, I watched that.

When the regularly scheduled episodes returned with Julia, she was beginning to get some media attention. On the one hand, I thought this was great because she certainly deserved it, but it made it harder for me to avoid spoilers (really? Who needs to avoid spoilers for Jeopardy!?). I started to watch the episode a few hours after it aired on some nights because I noticed that some folks were tweeting about Julia’s streak continuing.

Julia hit her 20th win in a row on a Friday, which meant she got to come back on Monday. It just so happened that I was near the TV on Monday night, so, to avoid spoilers, I watched the episode live. As you already know (either from the title of this post or from knowing), Julia went on to lose that game. After she lost, I laughed to myself, “I shouldn’t have watched the episode live — that’s why Julia lost.”

Now, did you notice the cognitive bias?

The confirmation bias.

To be fair, I didn’t divulge all the information up front, but if you understand the confirmation bias, you’re going to think you have all the information. After watching Julia lose attempting to win her 21st game in a row, I said to myself that because I watched it live, she lost. [Note: of course, you’re going to have to suspend disbelief for a short while as my watching or not watching an episode of Jeopardy is not actually going to cause or not cause someone to win/lose. At this point, it’s science fiction.]

The thing I’m not telling you (nor was I telling myself to have said this to myself then, lest I be experiencing cognitive dissonance), was that I had also snuck a peak at a few of the episodes from wins 16 to 20. That is, even though I may not have watched a full episode live until her loss going for win 21, I did watch some bits of the other episodes live. So, at the conclusion of Julia’s streak, I selectively (though not intentionally) misremembered the number of times I’d seen Julia live and concluded that by my watching live, she lost.

Best Posts of Jeremiah Stanghini’s Blog in 2013

Last year when I did a best posts series, I ended up doing three different posts. This year, since all of the posts that appear on this website originated on this website, I wouldn’t need to include any posts about Genuine Thriving. My first inclination was to do a best of 2013 and a best of all-time, but after looking at the statistics, the best of 2013 and the best of all-time are essentially — identical. As a result, I decided to just do the one post of the best posts of 2013.

Before revealing the top 6 posts along with an excerpt, there is one thing to keep in mind. On the old site, there used to be only an excerpt shown with the post. So, if someone wanted to read the whole post, they had to click the link (this was just how the theme worked). On this site, however, I specifically chose a theme where folks wouldn’t have to click a link to view the whole post (only to share or comment because those links are on the post’s page). As a result, the statistics for the most popular posts are sure to be skewed because people may have read a certain post more than another, but without them clicking the link for the post, there’s no way (that I know of) for me to know. On top of that, the theme I’ve chosen here allows the viewer to scroll (all the way to the first post!) What does that mean? When you’re on the homepage, you can continue to scroll down and more posts will load… all the way ’til you get to the first post. And in looking at the statistics of the top posts, it’s clear that “scrolling down” is far and away the most popular “post” on this site (this was true last year, too). With that in mind, here they are with an excerpt for each:

The Official Final Jeopardy Spelling Rules [UPDATED]

If you know me, you know that I’m really good at finding things on the Internet. After doing a couple of cursory google searches (Final Jeopardy RulesOfficial Final Jeopardy RulesOfficial Jeopardy Rules), I was surprised that I couldn’t find them. Sometimes, the site that hosts a document like this doesn’t do a good job of using keywords. So, I thought I’d poke around the official Jeopardy site — nothing.

After some more derivations of “Rules of Jeopardy,” I was beginning to think that maybe the rules aren’t online. I thought that maybe the contestants were handed a paper copy that they signed before going on the show and that document wasn’t online. Having never been a contestant on Jeopardy (though I’d like to be some time!) I couldn’t confirm whether this was true. However, given that it’s a game show, I’m sure they signed something before going on the show. Regardless, I didn’t have access to that document.

In The End, Everything Will Be OK – If It’s Not OK, It’s Not Yet The End

It’s no secret that I like quotes. Since converting my Facebook profile to a Facebook page, I’ve gotten into the habit of sharing a “quote of the day.” If my calculations are correct, I’ve been sharing quotes of the day for over 80 days now. As you’ll notice that I also have a quotes category, I’ve shared a number of quotes here on this site, too. And if I think back to the days of AIM (AOL Instant Manager), I often had quotes as my “away” message. And even before then, I remember really liking quotes in high school and in elementary (or grade) school. So, like I said, it’s no secret that I like quotes.

If You Want to Be Happy, Spend Your Bonus On Your Coworkers

That bonus you were looking forward to at the end of the year is “yours” and you should get to spend it on you and your family. Except, research shows that’s not the case. In fact, the research indicates that spending the money on someone other than yourself actually leads to greater happiness. More than that, it can lead to your improved performance at work.

The Confirmation Bias — What Do You Really Know: List of Biases in Judgment and Decision-Making, Part 6

Why is the confirmation bias so loathed? Well, as Nickerson points out, it may be the root cause of many disputes both on an individual and an international level. Let’s think about this for a second: let’s say that in the world of objectivity “out there,” there are any number of possibilities. In the world  of subjectivity “inside my head,” there are only the possibilities that I can imagine. Humans, on the whole, tend to fear change (there are over 600,000,000 results for that search on Google!). In order to allay those fears, I’m going to prefer information that already conforms to my previously held beliefs. As a result, when I look “out there,” I’m going to unconsciously be looking for things that are “inside my head.”

Advancing America’s Public Transportation System: High-Speed Rail in the USA

When it was first announced that the US was going to work on , I was very excited! Growing up in the , I am very familiar with the value of public transportation. I often rode a bus to and from school. As I matured and wanted to explore downtown with my friends, we’d ride the  to get there from the suburban area we lived. Beyond that, when I needed to make trips between Detroit and Toronto, I would ride the  between Toronto and Windsor instead of taking the 45 minute flight. Public transportation is a great way, in my opinion, to feel better about reducing one’s .

Three Lessons from The Hobbit: On Doing What You Can, Having Faith, and Demonstrating Leadership

Anyway, as I was watching, there were a few instances I noticed that could serve as quintessential lessons. Given that The Hobbit is a good example of the hero’s journey, it’s not surprising that there’d be great lessons to be found in the story.

Neither the Beginning nor the End — Remember the Middle: List of Biases in Judgment and Decision-Making, Part 12

It’s Monday, so you know what that means — another cognitive bias! This week, I thought I’d combine two because they’re essentially two sides of the same coin. They are: the primacy effect and the recency effect. Believe it or not, these biases are just what they sound like. The primacy effect is the idea that we overweight information we received ‘near the beginning,’ and the recency effect is the idea that we overweight information we received ‘more recently.’

These biases are usually studied in the context of memory and recall. That is, the primacy effect being that people tend to have a better likelihood of remembering information from the beginning and the recency effect being that people tend to have a better likelihood of remembering information they received more recently.

We can certainly see how this would affect our ability to make bias-free decisions. Let’s say that you’re shopping for a new television. You put in a few days worth of research. The biases we have just mentioned above tell us that we might be more likely to give undue weight to the information we found in the beginning (or the information we found most recently). While the purchase of a TV might not be an “important” decision, what if we were interviewing candidates for a job? We might be more likely to view the people in the beginning more favorably or the people towards the end more favorably. This is part of the reason companies use things like standardized questions during the interview as a way to institute some continuity from one interviewee to the next.

Ways for Avoiding the Primacy/Recency Effect(s)

How you avoid these two biases really depends on the context of the decision you’re making. For instance, if you want people to remember something, you probably don’t want to give them a long list (thereby invoking the possibility of one of these two biases to happen). There are some general ways to mitigate these biases, though.

1) Keep a record (write down the data)

One of the simplest ways that either of these biases can have an impact on a decision is when there isn’t a record of data. If you’re just making a decision based on what you remember, there will be an unnecessary weighting for the beginning or the end. As a result, keeping a record of the choices can make it easier to evaluate all choices objectively.

2) Standardized data

As I mentioned earlier in this post, it’s important that the data by which you’re evaluating a choice be standardized. As we looked at in number one, keeping data isn’t always enough. it’s important that the data be uniform across choices, so an evaluation can be made. In this way, it’s easier to look at earlier choices and later choices equally whereas if this weren’t instituted, there might be a slight bias towards the beginning or the end. This tip would work for situations similar to making a purchase (and gathering data), interviewing candidates, or something that can be analogized to either of these two.

If you liked this post, you might like one of the other posts in this series:

WRAP — An Acronym from Decisive: List of Biases in Judgment and Decision-Making, Part 10

I recently came across a post from Farnam Street that seems like it would make a great addition to the series we’ve been exploring over the last 10 weeks (biases in judgment and decision-making). So, instead of going over another bias today, I thought I’d share the information I found and tie it back into our series. Check back next week for a new bias (it could be functional fixedness, the hindsight bias, the status quo bias, or maybe the recency/primacy effect(s)…)

The author of the Farnam Street blog summarized some of the work in Chip and Dan Heath’s new book: Decisive: How to Make Better Choices in Life and Work. Given that our series is about decision-making, this book seems like it would be absolutely on-point, with regard to the closing of each post (How to avoid *blank*).

I haven’t yet read the book, but I did want to include a brief excerpt (courtesy of Farnam Street), along with a lead-in from Farnam Street:

The Heaths came up with a process to help us overcome these villains and make better choices. “We can’t deactivate our biases, but … we can counteract them with the right discipline.” The nature of each of the four decision-making villains suggests a strategy for how to defeat it.

1. You encounter a choice. But narrow framing makes you miss options. So … Widen Your Options. How can you expand your sent of choices? …

2. You analyze your options. But the confirmation bias leads you to gather self-serving information. So … Reality-Test Your Assumptions. How can you get outside your head and collect information you can trust? …

3. You make a choice. But short-term emotion will often tempt you to make the wrong one. So … Attain Distance Before Deciding. How can you overcome short-term emotion and conflicted feelings to make better choices? …

4. Then you live with it. But you’ll often be overconfident about how the future will unfold. So … Prepare to Be Wrong. How can we plan for an uncertain future so that we give our decisions the best chance to succeed? …

There’s also a handy picture that’s included (again, courtesy of Farnam Street):

As we can see, the Heaths have offered four universal ways for avoiding biases in judgment and decision-making. If we recall some of the different ways for avoiding biases that we’ve discussed over the last 9 weeks, many of them can be collapsed into one of the categories listed above. In case you’re a bit hazy, here are some of the biases that we’ve talked about before that have a “way for avoiding” that falls into one of the categories above:

So, if you’re having trouble remembering the different ways for avoiding the biases we’ve talked about, all you have to do is remember “W-R-A-P!”