Even though those shortcuts are quite useful, sometimes they can actually hinder us.
In other words, our brain plays tricks on us (kind of like an optical illusion)
Cognitive biases can be quite dangerous if you are not aware of them. In the same time, it is impossible to eliminate them completely. If you don’t want to fall for common bias traps, you should at least be aware of the tricks your brain is pulling on you. Here is a list of the most popular cognitive biases and how it affects our logical thinking:
Logical Thinking & Cognitive Biases
1) Anchoring Bias
Imagine that I am trying to sell you a house for $300.000 and you are interested in buying it.
You decided that you want to wait a week and think about it. If a week later I offer to sell it to you for $200.000 this will appear to be a great deal.
What would happen if the initial price of the house was $100.000 and a week later I would try to sell it to you for $200.000? All of a sudden you would feel like I’m ripping you off, right?
The first information will have a big impact on the stuff that comes afterward. It will affect the perception of all the information that comes later. It does that, by creating a positive or negative contrast.
That is also the reason why first impressions matter.
Yet, I bet you are quite certain it is not flat, square or rectangular. (unless you belong to Flat Earth Society)
I’m not challenging that belief. All I’m saying is that you most likely haven’t seen it first hand.
People tend to believe in things, not because they actually do believe it, but because that’s what the rest of the world believes in.
Same happens in stocks. Once a couple of people buy in, the value rises and other people start to buy in as well.
Value of a stock didn’t rise but at a certain point, the hype is all it takes.
In politics, this phenomenon gives rise to groupthink. It throws logical thinking into the trash.
It’s human nature to:
Minimize conflict – with a few exceptions, most people don’t want to fight.
Suppress dissenting viewpoints – authority figures are usually, very strongly opinionated and convincing. The flip side of this is that they tend – consciously or otherwise – to stifle viewpoints that contradict their worldview.
Isolate outside influences – While this may be very useful in getting everyone aligned on an objective. If taken too far it is dangerous, leading to “not invented here” syndrome and hubris.
Appeal to authority– people must be encouraged to “speak truth to power” and call out the elephant in the room.
Let’s say you are shy and don’t think much of yourself. When you walk past a group of people, you hear them laughing.
You are more likely to assume that they are laughing at you given the belief you hold about yourself.
On the flip-side, if you think you’re awesome. You walk tall, with your shoulders back. This would never bother you. Cause all the interpretations you make about the event are in alignment with the belief – I’m awesome.
Some people believe they are so awesome that they have developed blind spots to anything that is not congruent with that belief. This can be quite dangerous too, so be careful.
Once you start to believe something is true, you will seek the evidence supporting your argument. You are likely to completely ignore any disapproving arguments.
If you are Trump supporter you don’t see his flaws, if you are Hilary supporter, all you see is Trump’s flaws.
Perspective matters as we have a tendency to interpret and recall information that fits our worldview.