What is Cognitive Bias
We have to make numerous decisions every day. Some of these decisions are routine and may not require much effort. Still, some decisions need to recall all our knowledge and information, find out the different alternatives, and then choose the best alternative using reason and logic. In making decisions, we have to assume the information unavailable to us and consider the probability of success and failure based on all known factors based on our experience. Sometimes, when the issue is crucial and we have sufficient time to collect information, we can devote adequate time to critically analyse all alternatives to reach our decisions. However, we often have to make quick decisions based on whatever information is available, using shortcuts and heuristics acquired through our knowledge and experience. However, such quick decision-making can cause predictable errors, called “cognitive bias”.
The concept of cognitive bias was first introduced by Amos Tversky and Nobel laureate Daniel Kahneman in 1972. In the earlier chapter, we discussed how our knowledge and experience gradually get integrated into our instincts, and we develop intuition to make quick decisions using our emotions and heuristics. While intuition is helpful in quick decision-making, it also leads to systematic and predictable errors.
Cognitive bias results from the systematic thought process caused by the human brain to simplify information processing through a filter of personal experience and preferences. The filtering process is a coping mechanism that enables the brain to quickly prioritize and process large amounts of information. While cognitive biases help humans find mental shortcuts to assist in navigating daily life, they also cause irrational interpretations and judgments that can be predicted and avoided.
A cognitive bias is not the same as a logical fallacy. A logical fallacy is the result of an illogical argument due to our lack of knowledge or skill to use logic to understand and solve complex problems of life. We can reduce logical fallacies through knowledge and practice. However, cognitive biases are related to mental shortcuts or heuristics based on emotions and intuitions that are helpful in quick decision-making. However, cognitive and emotional biases play an important role for the development of informal logical fallacies.
We can’t live without shortcuts since it is not possible to completely eliminate our emotions, instincts and intuition, which have been developed over our lifetime and provide us many advantages to connect with other individuals and deal with routine issues of life effortlessly. However, it is vital to understand the essential cognitive biases to know how to minimise them, mainly when dealing with critical issues, and not commit grave mistakes by making irrational decisions based on intuition and emotions.
The list of cognitive biases is long, and experts have identified hundreds of them. We shall discuss some essential cognitive biases in this chapter. We have categorised the Cognitive Biases into three broader categories
- Sef-serving Biases
- Availability Biases
- Loss Aversion Biases
We shall discuss about these biases in the next chapters.
