Anchoring Bias
**Which Means?** You rely heavily on the first piece of information you receive.
**For Example:** Seeing a high starting price makes discounts seem better.
Anchoring Bias occurs when an individual depends too heavily on an initial piece of information (the "anchor") to make subsequent judgments during decision making. Once the anchor is set, there is a bias toward adjusting or interpreting other information to reflect the "anchored" information. This bias can significantly impact various decisions, such as negotiations, pricing, and estimates, as the first piece of information shapes one's perspective and expectations.
Authority Bias
**Which Means?** You trust opinions from perceived authorities more.
**For Example:** Trusting a health tip because a doctor mentioned it.
Authority Bias is the tendency to attribute greater accuracy to the opinion of an authority figure (unrelated to its content) and be more influenced by that opinion. This bias is often seen in scenarios where people defer to experts in fields they may not fully understand. While seeking expert advice can be beneficial, overreliance on authority can lead to poor decision making if the authority's information is flawed or misinterpreted.
Availability Heuristic
**Which Means?** You judge things based on information readily available or easily recalled.
**For Example:** Thinking flying is unsafe after hearing about a plane crash.
The Availability Heuristic is a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision. The problem with this bias is that the most readily recalled information might not be the most accurate or representative, leading to distorted views and overestimations of likelihood or frequency.
Bandwagon Effect
**Which Means?** You tend to follow popular opinions or trends.
**For Example:** Wearing a fashion trend because everyone else is.
The Bandwagon Effect is a psychological phenomenon where people do something primarily because others are doing it, regardless of their own beliefs, which they may ignore or override. This effect can be observed in various social contexts, such as political rallies, fashion trends, and stock market behaviors. It underscores the influence of peer pressure and the desire to fit in with the group.
Confirmation Bias
**Which Means?** You favor information that confirms your existing beliefs.
**For Example:** Ignoring data that contradicts your political views.
Confirmation Bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one's prior beliefs or values. This bias leads to statistical errors, as individuals give more weight to evidence that confirms their beliefs and undervalue evidence that could disprove it. It is a pervasive issue in critical thinking and scientific research.
Dunning-Kruger Effect
**Which Means?** You overestimate your ability when you know little about something.
**For Example:** Believing you’re good at chess after a few games with friends.
The Dunning-Kruger Effect is a cognitive bias whereby individuals with low ability, expertise, or experience in a specific domain overestimate their own ability or knowledge. This effect is attributed to a metacognitive inability to recognize their own ineptitude. Conversely, highly competent individuals may underestimate their relative competence, assuming tasks that are easy for them are easy for others as well.
Endowment Effect
**Which Means?** You value things more when you own them.
**For Example:** Pricing your used car higher than market value because it’s yours.
The Endowment Effect is a cognitive bias that causes individuals to value an owned object higher than its market value. This bias suggests that ownership creates an emotional attachment, making people less willing to part with the item, even for a price that exceeds its objective value. It has implications for consumer behavior, negotiations, and economic transactions.
Halo Effect
**Which Means?** You judge a person's character from an overall positive impression.
**For Example:** Assuming a neat person is also punctual.
The Halo Effect is a type of cognitive bias where an observer's overall impression of a person, company, brand, or product influences their feelings and thoughts about that entity's character or properties. Essentially, a single positive attribute can influence the perception of other, unrelated attributes. This bias affects judgments in hiring, marketing, education, and other domains.
Illusory Correlation
**Which Means?** You mistakenly believe two unrelated things are connected.
**For Example:** Associating the number 13 with bad luck.
Illusory Correlation is the phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists. This bias can lead to incorrect assumptions about causes and effects. It often arises from selective attention and memory, where unusual or novel occurrences are more memorable.
Negativity Bias
**Which Means?** You focus more on negative events than positive ones.
**For Example:** Remembering the one bad review among many positive ones.
Negativity Bias is the notion that, even when of equal intensity, things of a more negative nature (e.g., unpleasant thoughts, emotions, or social interactions; harmful or traumatic events) have a greater effect on one's psychological state and processes than neutral or positive things. This bias can influence decision making, relationships, and mental health.
Outcome Bias
**Which Means?** You judge a decision by its outcome, not the decision-making process.
**For Example:** Praising a risky investment just because it succeeded.
Outcome Bias is a cognitive bias that occurs when the outcome of a decision is used to judge the quality of the decision-making process that led to it. This can lead to the erroneous belief that good outcomes are always the result of good decisions and bad outcomes are the result of bad decisions, ignoring the role of chance and external factors.
Recency Effect
**Which Means?** You give more weight to the latest information or experiences.
**For Example:** Choosing a movie based on the last trailer you saw.
The Recency Effect is a cognitive bias that results from disproportionate salience of recent stimuli or observations. In other words, people tend to remember and give more weight to the most recent information. This bias affects learning, memory recall, and decision-making processes, often overshadowing earlier, potentially more relevant information.
Self-Serving Bias
**Which Means?** You credit your successes to yourself and blame your failures on others.
**For Example:** Claiming a win was due to your skill, but blaming the weather for a loss.
Self-Serving Bias is a common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events. This bias helps protect self-esteem and self-image, but it can lead to a distorted view of reality and hinder personal growth and accountability.
Spotlight Effect
**Which Means?** You think others notice your mistakes or appearance more than they do.
**For Example:** Worrying everyone saw you spill your drink.
The Spotlight Effect is the phenomenon in which people tend to believe they are being noticed more than they really are. This bias leads to overestimating how much others notice one's appearance or behavior, often leading to heightened self-consciousness and social anxiety.
Sunk Cost Fallacy
**Which Means?** You stick with a choice even if it becomes clear it is a bad one.
**For Example:** Finishing a meal you don’t like because you paid for it.
The Sunk Cost Fallacy is the tendency to continue an endeavor once an investment in money, effort, or time has been made, despite new evidence suggesting that the cost, going forward, outweighs the benefits. This fallacy arises from the desire to avoid wasting resources already spent and can lead to irrational decision-making and increased losses.
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Upgrade to Premium+B-Tech from IIT-Madras, PGDM from IIM-Bangalore, Writer. Views Strictly Personal. RTs not endorsed. Managed by Ahinda DEI.
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