This one is beloved by business people setting prices, but beware anchoring if you're a consumer. It's much easier to simply ignore information that calls our most cherished ideas into question than it is to engage with threatening new information. This is commonly seen in businesses when a person makes assumptions about what customers may do based on what they do themselves, and what people they know do. Human brains are lazy and like consistency, that includes ideas that are consistent about a particular person or entity. Biases in how we think can be major obstacles in any decision-making process. (Alarmist news broadcasts don't much help us get an accurate sense of events' actual frequency either.). We never really know if we have all of the facts, but it’s certainly easy to assume we do. Hence, the overarching problem with biases is that they can influence our decision-making processes without us being aware of it at all. The mental shortcut that enables people to make judgments quickly and efficientlyis called heuristics. But there's at least one huge problem with this approach. By categorizing individuals in terms of four dichotomies—thinking and feeling, extroversion and introversion, judging and perception, and sensing and intuition—the MBTI provides a map of the individual’s orientation toward decision making. Don’t be distracted by reams of facts that won’t actually bear relevance to the decision. It’s a good thing to learn to self-question, particularly if we think we don’t need to. Although the reality of most of these biases is confirmed by reproducible research, there are often controversies about how to classify these biases or how to explain them. But the truth is natural selection hasn't been nudging our brains to be ever more rational. That's why so many people are afraid of plane crashes, child abductions, and terrorism, which in reality are extremely rare, and blasé about car accidents, which kill more than 30,000 Americans a year. Cognitive biases are often a result of your brain's attempt to simplify information processing. This allure of the post-decision feeling is also an influencing factor. Cognitive biases increase our mental efficiency by enabling us to make quick decisions without any conscious deliberation. Cognitive bias is a systematic way in which the context and framing of information influence individuals’ judgement and decision making. That's why, when someone makes a positive impression with their small talk and self presentation in the first minutes of a job interview, you're more likely to view their professional accomplishments as similarly positive later. These scientific human biases affect the way we shop, invest and judge brands and people. Cognitive … It was during the 1950s that the Nobel-prize winning psychologist Herbert Simon suggested that while people strive to make rational choices, human judgment is subject to cognitive limitations. When these cognitive factors are at play, we may not even be aware of it. We all have our opinions and unfortunately a lack of impartiality is probably the biggest influencing factor affecting the way we make decisions. Cognitive biases are difficult to overcome because they are often hardwired into our subconscious, a product of brain evolution that enables quick (but not necessarily correct) decision making. Not all information is relevant and often decision-makers absorb irrelevant information which has no bearing on the decision itself. Just because the outcome of a decision was successful, doesn’t mean the actual decision was a good one. Try to think about why you’ve chosen a certain option. The idea is that once we've invested time and/or money in something, we become vastly less likely to abandon it, even once it should be clear that the project will ultimately fail. Zero-risk bias is a tendency to prefer options that result in the complete elimination of risk. This is notoriously tricky where decisions are being made by people in different countries. Cognitive biases contribute significantly to diagnostic and treatment errors. #1 Overconfidence Bias. This can become very detrimental to the organization over the long term if the company is paralyzed by a lack of decision making. The limitation in objective thinking is known as Cognitive Bias. Some cultures are notoriously slow at making decisions. They likely enabled faster decision-making when speed was more valuable than accuracy, as we saw in the heuristics entry. Humans don't like to change their opinions. So, let’s take a closer look at what we’re all doing in the midst of decision-making (cognitive biases), and what we can do about it. French | German | Spanish | Italian | Dutch | Arabic | Russian | Japanese | Chinese | Korean | Portuguese | Swedish | Norwegian | Finnish, Cognitive Biases That Influence Decision Making. Adwords Expanded Text Ads & Double-Byte Languages, Handwriting ‘Accents’: How We Write Reveals Our Cultural Identity, How German Banks Are Erecting Language Barriers, Easy Website Localization with Drupal & TranslateMedia, Meet The Chatbots That Are Changing Our Everyday Lives, The Technology Behind Fortune Global 500 Companies, Tools to Help You Build a Business Case for Going Global. This article examines why it’s so hard to make the “right” decisions and takes a look at the cognitive bias that can influence the decision making process in various cultures around the world.
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