Decision Making Biases
Continuing to invest in something because of past investments, even when it's no longer rational. Example: Finishing a movie you're not enjoying simply because you've already watched half of it.
Sunk Cost Fallacy
The practice of thinking or making decisions as a group, resulting in unchallenged, poor-quality decision-making.
Example: The Challenger space shuttle disaster, where NASA officials ignored engineers' warnings about O-ring failures due to pressure to launch.
Group Think
The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.
Example: A political partisan only reading news sources that align with their views, dismissing contrary evidence as "fake news."
Confirmation Bias
The tendency to claim more responsibility for successes than failures.
Example: An actor attributing the success of a film to their own skills and abilities, but blaming a box-office bomb on the quality of the script.
Self-Serving Bias
The tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.
Example: A car salesman who first presents a very expensive car, before then moving to a more "affordable" yet still high priced model.
Anchoring Effect
The tendency to attribute greater accuracy to the opinion of an authority figure and be more influenced by that opinion, regardless of other circumstances.
Example: Believing in financial advice from a person in a business suit over the same advice from someone in casual attire.
Authority Bias
The tendency to change ones recollection of an event as a direct result of hearing false or contradicting information about the event after the fact.
Example: Someone who was at the scene of a shooting, "remembering" false details of the event due to having later watched a misleading news article about it.
Misinformation Effect
People with limited knowledge or expertise in a specific area overestimate their abilities.
Example: A casual male basketball player claiming that if they were to play in the WNBA, they would dominate.
Dunning Kruger Effect
Drawing different conclusions from the same information depending on how it's presented.
Example: Being more likely to choose a medical treatment when told it has an 80% survival rate versus a 20% mortality rate.
Framing Effect
The tendency for positive impressions of a person, company, brand, or product in one area to positively influence one's opinion or feelings in other areas. Example: Assuming a physically attractive person is also intelligent, kind, and successful without any evidence of these traits.
Halo Effect
Believing that past events were predictable after they've occurred.
Example: Claiming "I knew it all along" about a sports game outcome after it has finished.
Hindsight Bias
The tendency to attribute one's own actions to external causes while attributing other people's behaviors to internal causes.
Example: A student blaming their poor test performance on a noisy environment, but attributing a classmate's poor performance to lack of preparation.
Actor-Observer Bias
The tendency to overestimate the likelihood of events with greater "availability" in memory, which can be influenced by how recent the memories are or how emotionally charged they may be.
Example: Overestimating the risk of shark attacks after watching "Jaws" or hearing about a rare shark incident on the news.
Availability Heuristic
Adopting beliefs or behaviors because many others have done so.
Example: Buying a popular cryptocurrency without understanding it, just because everyone else seems to be doing it.
Bandwagon Effect
The tendency to overestimate the extent to which one's own opinions, beliefs, preferences, values, and habits are normal and typical of those of others. Example: A vegetarian assuming that a much larger percentage of the population is vegetarian than is actually the case.
False Consensus Bias
The tendency to believe that one is less likely to experience a negative event compared to others. Example: A smoker believing they are less likely to develop lung cancer than other smokers, despite engaging in the same high-risk behavior.
Optimism Bias