Cognitive Bias

cognitive bias is when someone makes a bad choice that they think is a good choice. This bias is an important part of the study of cognitive psychology, which looks at basic actions of the mind, such as thought, feeling, problem solving, memory, and language.

Cognitive biases are often a side effect of evolutionary changes. Some behaviors that were beneficial for primitive humans and animals are unsuited to modernity. Others are adaptive and may lead to more effective actions in a given context.

More technically, cognitive biases are a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own ‘subjective social reality’ from their perception of the input. An individual’s construction of social reality, not the objective input, may dictate their behavior in the social world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.

Allowing cognitive biases enable faster decisions which can be desirable when timeliness is more valuable than accuracy (similar to heuristics or mental shortcuts). Other cognitive biases are a ‘by-product’ of human processing limitations, resulting from a lack of appropriate mental mechanisms (bounded rationality), or simply from a limited capacity for information processing.

A continually evolving list of cognitive biases has been identified over the last six decades of research on human judgment and decision-making in cognitive science, social psychology, and behavioral economics. Bias arises from various processes that are sometimes difficult to distinguish. These include information-processing shortcuts (heuristics); noisy information processing (distortions in the process of storage in and retrieval from memory); the brain’s limited information processing capacity; emotional and moral motivations; and social influence.

The notion of cognitive biases was introduced by Amos Tversky and Daniel Kahneman in 1972 and grew out of their experience of people’s innumeracy, or inability to reason intuitively with the greater orders of magnitude. Tversky, Kahneman, and colleagues demonstrated several replicable ways in which human judgments and decisions differ from rational choice theory (a rational agent is assumed to balance costs and benefits and choose the best option available in any circumstance). Tversky and Kahneman explained human differences in judgement and decision making in terms of heuristics. Heuristics involve mental shortcuts which provide swift estimates about the possibility of uncertain occurrences. Heuristics are simple for the brain to compute but sometimes introduce ‘severe and systematic errors.’

For example, the representativeness heuristic is defined as the tendency to ‘judge the frequency or likelihood’ of an occurrence by the extent of which the event ‘resembles the typical case.’ The ‘Linda Problem’ illustrates the representativeness heuristic: participants were given a description of ‘Linda’ that suggests Linda might well be a feminist (e.g., she is said to be concerned about discrimination and social justice issues). They were then asked whether they thought Linda was more likely to be a ‘(a) bank teller’ or a ‘(b) bank teller and active in the feminist movement.’ A majority chose answer (b). This error (mathematically, answer (b) cannot be more likely than answer (a)) is an example of the ‘conjunction fallacy’; Tversky and Kahneman argued that respondents chose (b) because it seemed more ‘representative’ or typical of persons who might fit the description of Linda. The representativeness heuristic may lead to errors such as activating stereotypes and inaccurate judgments of others.

Biases can be distinguished on a number of dimensions. For example, there are biases specific to groups (such as the ‘risky shift,’ the tendency for groups to take more risks than the individuals within these groups would have taken had they been faced with the same problem ) as well as biases at the individual level. Some biases affect decision-making, where the desirability of options has to be considered (e.g., sunk costs fallacy, the tendency to make financial decisions based on how much you’ve already invested, rather than the current situation). Others such as illusory correlation affect judgment of how likely something is, or of whether one thing is the cause of another. A distinctive class of biases affect memory, such as consistency bias (remembering one’s past attitudes and behavior as more similar to one’s present attitudes). Some biases reflect a subject’s motivation, for example, the desire for a positive self-image leading to egocentric bias and the avoidance of unpleasant cognitive dissonance (the mental discomfort from attempting to hold conflicting beliefs).

Other biases are due to the particular way the brain perceives, forms memories and makes judgments. This distinction is sometimes described as ‘hot cognition’ versus ‘cold cognition,’ as motivated reasoning can involve a state of arousal. Among the ‘cold’ biases, some are due to ignoring relevant information (e.g., neglect of probability). Some involve a decision or judgement being affected by irrelevant information (for example the framing effect where the same problem receives different responses depending on how it is described; or the distinction bias where choices presented together have different outcomes than those presented separately). Others give excessive weight to an unimportant but salient feature of the problem (e.g., anchoring).

The fact that some biases reflect motivation, and in particular the motivation to have positive attitudes to oneself accounts for the fact that many biases are self-serving or self-directed (e.g., illusion of asymmetric insight, self-serving bias). There are also biases in how subjects evaluate in-groups or out-groups; evaluating in-groups as more diverse and ‘better’ in many respects, even when those groups are arbitrarily-defined (ingroup bias, outgroup homogeneity bias). Some cognitive biases belong to the subgroup of attentional biases which refer to the paying of increased attention to certain stimuli. It has been shown, for example, that people addicted to alcohol and other drugs pay more attention to drug-related stimuli.

Some of the more studied cognitive biases include the fundamental attribution error (FAE), also known as the correspondence bias, it is the tendency for people to over-emphasize personality-based explanations for behaviors observed in others. At the same time, individuals under-emphasize the role and power of situational influences on the same behavior. In a classic study of the FAE, despite being made aware that the target’s speech direction (pro-Castro/anti-Castro) was assigned to the writer, participants ignored the situational pressures and attributed pro-Castro attitudes to the writer when the speech represented such attitudes.

Another commonly studied bias is the tendency to be influenced by what someone else has said to create a preconceived idea, called the priming bias. The confirmation bias, is the tendency to search for or interpret information in a way that confirms one’s preconceptions. In addition, individuals may discredit information that does not support their views. The confirmation bias is related to the concept of cognitive dissonance. Whereby, individuals may reduce inconsistency by searching for information which re-confirms their views. The affinity bias is the tendency to be biased toward people like ourselves. The self-serving bias is the tendency to claim more responsibility for successes than failures. It may also manifest itself as a tendency for people to evaluate ambiguous information in a way beneficial to their interests. The belief bias is when one’s evaluation of the logical strength of an argument is biased by their belief in the truth or falsity of the conclusion. Framing is using a too-narrow approach and description of the situation or issue. Hindsight bias, sometimes called the ‘I-knew-it-all-along’ effect, is the inclination to see past events as being predictable.

A 2012 ‘Psychological Bulletin’ article suggests that at least eight seemingly unrelated biases can be produced by the same information-theoretic generative mechanism. It is shown that noisy deviations in the memory-based information processes that convert objective evidence (observations) into subjective estimates (decisions) can produce regressive conservatism, the belief revision (Bayesian conservatism, the tendency to revise one’s belief insufficiently when presented with new evidence), illusory correlations (perceiving a relationship between variables where none exists), illusory superiority (better-than-average effect) and worse-than-average effect (the tendency to underestimate one’s achievements and capabilities in relation to others), subadditivity effect (the tendency to assume the whole will be worth less than the sum of its parts), exaggerated expectation, overconfidence, and the hard–easy effect (the tendency to overestimate the probability of one’s success at a task perceived as hard, and to underestimate the likelihood of one’s success at a task perceived as easy).

Many social institutions rely on individuals to make rational judgments. The securities regulation regime largely assumes that all investors act as perfectly rational persons. In truth, actual investors face cognitive limitations from biases, heuristics, and framing effects. A fair jury trial, for example, requires that the jury ignore irrelevant features of the case, weigh the relevant features appropriately, consider different possibilities open-mindedly and resist fallacies such as appeal to emotion. The various biases demonstrated in these psychological experiments suggest that people will frequently fail to do all these things. However, they fail to do so in systematic, directional ways that are predictable.

Cognitive biases are also related to the persistence of superstition, to large social issues such as prejudice, and they also work as a hindrance in the acceptance of scientific non-intuitive knowledge by the public. However, in some academic disciplines, the study of bias is very popular. For instance, bias is a wide spread phenomenon and well studied, because most decisions that concern the minds and hearts of entrepreneurs are computationally intractable.

Because they cause systematic errors, cognitive biases cannot be compensated for using a wisdom of the crowd technique of averaging answers from several people. Debiasing is the reduction of biases in judgment and decision making through incentives, nudges, and training. Cognitive bias mitigation and cognitive bias modification are forms of debiasing specifically applicable to cognitive biases and their effects. Reference class forecasting is a method for systematically debiasing estimates and decisions, based on what Daniel Kahneman has dubbed the outside view.

One debiasing technique aims to decrease biases by encouraging individuals to use controlled processing compared to automatic processing. In relation to reducing the FAE, monetary incentives and informing participants they will be held accountable for their attributions have been linked to the increase of accurate attributions. Training has also shown to reduce cognitive bias. Research participants exposed to one-shot training interventions, such as educational videos and debiasing games that taught mitigating strategies, exhibited significant reductions in their commission of six cognitive biases immediately and up to three months later.

There are criticisms against theories of cognitive biases based on the fact that both sides in a debate often claim each other’s thoughts to be in human nature and the result of cognitive bias, while claiming their own viewpoint as being the correct way to ‘overcome’ cognitive bias. This is not due simply to debate misconduct but is a more fundamental problem that stems from psychology’s making up of multiple opposed cognitive bias theories that can be non-falsifiably used to explain away any viewpoint.

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