Your ability to make smart decisions relies heavily on your own judgement. However, through life experiences, you may have developed your own types of biases which have skewed your perception.
Decision making that is influenced by cognitive biases can be detrimental because biases lead to flawed logic. The worst part of cognitive biases, are that you could be making irrational decisions without any awareness.
The best way to avoid making a bad decision is to learn the types of biases that are common, and recognize how you may be susceptible to them.
Here are 9 types of biases that can influence your decisions.
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What Is A Cognitive Bias?
A cognitive or psychological bias is a type of thinking that uses illogical rationale. Your own prejudices and limiting experiences can contribute to biases without your knowing.
Everyone has cognitive biases, but the severity of effect can range from person to person. You can help to limit your own biases by educating yourself on what they look like, and putting forth effort to make yourself aware of when you are using them.
What Are Examples Of Types Of Biases?
1. Bias Blind Spot
The tendency to see ourselves as less biased than others
This is probably a bias you were having before reading! The truth is, we all have biases, and it’s critical to acknowledge that they are there.
2. Groupthink Effect
The tendency to do or believe things because many other people do or believe the same
If you want to differentiate yourself from others, you have to step outside of your comfort zone. Straying away from the norm can be a frightening, but to rise up above everyone else, it can be a risk worth taking. Sticking only to what you know will leave you stagnated, frustrated, and mediocre at best!
Try to avoid information overload. While inspiration is a great tool for creativity, too much #inspo will cloud your own ideas.
3. Confirmation Bias
Seeking information that supports what we already believe
You might as well throw away the drawing board with this one. If you already had all of the facts, wouldn’t you have achieved your goals already?
Be humble, admit when you are wrong, and play devil’s advocate. By looking at the same problem in two, three, or even ten different viewpoints, you will be able to be more objective when making decisions.
4. Pessimism Bias
Even when of equal intensity, things of a more negative nature have a greater effect on you than neutral or positive things
Negative thinking is a ticking time-bomb for yourself. If you believe something will go wrong, it’s more likely to happen. The rationale behind this is that you are less likely to take action to prevent that bad thing from happening, because you believe there’s no use!
Don’t let this bias get the best of you. Stay hopeful. Stay positive.
5. Optimism Bias
The belief that you are at a lesser risk of experiencing a negative event compared to others.
Entrepreneurs face challenges, mistakes, and mess-ups. To believe that nothing bad will happen is the BIGGEST mistake you can make. Planning, predicting, and taking action will allow you to prepare for the worst (but also hope for the best!).
6. Curse of Knowledge
When better informed people find it difficult to think about problems from the perspective of a lesser informed person
This can be harmful if you are not able to put yourself in the shoes of your customers. As experts, it is hard to think about what your readers or clients don’t know as it may come as second-nature to you.
Make it easy for your ideal clients to understand your message. Take the time to do research on what they are struggling with, what they need, and what they want. It’s better to give more information on your topic, than not enough.
7. Hyperbolic Discounting
Having a stronger preference for more immediate payoffs
This can be devastating because long-term goals are paramount for anybody to continue to grow. While personal growth can be rewarding, without a long-term plan in place there can be a point of plateau. Slow and steady wins the race!
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8. Irrational Escalation
Justifying increased investment in a decision, based on cumulative prior investment
This is another very common type of bias. When leading yourself or others, there will be many investments to make (time, money, opportunity, etc.) The more invested you become, the more likely you will be to continue down the path you are heading. However, if you realize that the path you are on is harmful, or is not as efficient as another path, start moving in the other direction.
Staying on a path simply because of prior investment could lead you to losing it all (if you haven’t already). Don’t dig yourself into a deeper and deeper hole. Take the loss and move forward!
9. Anchoring Bias
The reliance of judgement on the first piece of information presented
Although it may not be obvious, research practices are important. You need to know the cost & risk factors, best practices, likely time for completion, and much more. When you rely too heavily on one piece of information, it can skew your perception, decision making, and possibly the outcome.
Get the facts, and learn all that you can before making big decisions.
How Can I Overcome Types of Biases?
Because most types of biases go undetected, in our subconscious, it is important to take the time to think critically about your thoughts. This not only will help your mental state, but will also allow you to think more clearly.
Generally, people who rush into decisions end up basing their reasons on an illogical system from a cognitive bias.
Do Your Research
Before making any big decisions, you first need to know what you are getting into. Look at what experts in your field are saying, and search for the facts (backed by science). If there isn’t much scientific research in your field you should look to the experts.
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Get A Second Opinion
Hooray for diversity! One of the main reasons diversity is critical is to help balance the strengths and weaknesses of each other. People who have different worldviews and experiences can help to give an alternate opinion that could snuff out biases you may have.
Unfortunately, diversity isn’t quite as spread out as it should be, but this is mainly due to other people’s biases! (See how this works???)
Surround yourself with people who challenge your views. Try not to be easily offended. Everyone is entitled to their own opinion which means you are also entitled to yours.
People who have different worldviews and experiences can help to give an alternate opinion that could snuff out biases you may have.
Give Yourself Time To Think Clearly
Emotions and time pressures can lead to irrational decisions because it forces your default way of thinking to take over. Don’t let this happen! Take a breather, give yourself time to become level headed.
Subject Yourself To New Experiences
If you ever need an excuse to travel, here’s one! New experiences will give you a broader insight on how others think, and can challenge your own thoughts and beliefs. Diving into other people’s culture will surely ignite questions and observations that could lead to very eye-opening thoughts.
Traveling is a way that you can live the life of someone else, even if just for the day. If you follow the same routine over and over again, you can easily become stuck in your patterns, and never see outside of your own bubble.
Write A Pros/Cons List
This is a logical solution to figuring out most problems. It forces you to think critically, think of both sides of the issue, and visually see the differences. Writing down your thoughts is a great way to comprehend information because it involves higher level thinking to be able to produce a thought onto paper.
Awareness, Awareness, Awareness!
Learning about types of biases, and how they can affect your decision making will always be the best defense against their unfavorable outcomes. Before making any large decisions, take the time to think through where you got your information, how you are feeling, where your resources are from, and practice recognizing cognitive biases before they start.