Lord777
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For a long time, researchers and economists believed that people always make logical, well-thought-out decisions. However, over the past decades, scientists have discovered a wide range of mental errors that have undermined the reputation of our thinking.
We are able to make good decisions from time to time, but most of the time we make strange, irrational choices based on our emotions. Factrum publishes an article describing the five most common mental mistakes that constantly hinder our decision-making.
1. Survivor bias
Virtually all popular online media today are filled with survivorship bias. Headlines like “8 Things Successful People Do Every Day,” “The Best Tips Richard Branson Ever Got,” or “How LeBron James Trains in the Offseason,” are survivor bias in action.
Survivor bias refers to our tendency to focus on the winners in a particular area and learn from them, while completely forgetting about the losers who used the same strategy.
There are thousands of athletes who train in the same way as LeBron James, but they failed to make it to the NBA. The problem is that no one has heard of the thousands of athletes who have failed to reach the top. We only hear about people who “survived”. We mistakenly overestimate the strategies, tactics, and advice of one survivor, ignoring the fact that they don't work for most people. Another example: “Richard Branson, Bill Gates and Mark Zuckerberg dropped out of school and became billionaires! You don't need school to be successful. Entrepreneurs just need to stop wasting time studying and get busy."
For each Branson, Gates and Zuckerberg, there are several thousand other entrepreneurs who have failed, got into debt and left with an incomplete education. The survivor's systematic errors indicate that we do not know how this or that strategy will manifest itself specifically in our case. Since the winners are often remembered and the losers are forgotten altogether, it becomes very difficult to determine whether a particular strategy will lead to success or not.
2. Fear of loss
Loss aversion refers to our tendency to resolutely avoid losses on the way to making a profit. Research shows that if someone gives you $ 10, you will experience a small increase in satisfaction. But if you lose $ 10, you will experience a significantly higher loss of satisfaction. Yes, the reactions are opposite, but they are equal in magnitude.
Our tendency to avoid losses forces us to make stupid decisions and change our behavior just in order to preserve the things that we already have. We strive to protect the things we have, and this can lead to the fact that we overestimate them in comparison with other possible options.
For example, if you buy new shoes, it will give you a small boost in your enjoyment. If you have never been able to put on these shoes and decided to sell them after a few months, then this step will most likely be incredibly painful for you. You have never worn them, but for some reason you cannot part with them. Fear of loss. Likewise, you can feel a little bit of joy when all the traffic lights turn green for you on the way to work, but if the driver in front of you hesitates and you miss the opportunity to slip into the green light, you will feel angry ... The pain of the loss of opportunity is much stronger than the pleasure that occurred in the beginning.
3. Availability heuristic
The availability heuristic is a very common mistake our brains make in assuming that the examples that come to our minds are the most important or prevalent things.
Research by Stephen Pinker of Harvard University has shown that we are living in the least violent time in human history. There are many more people living in the world today than ever before. Homicide, rape, sexual harassment and child abuse have been steadily declining.
Many people are surprised when they hear these statistics. Some still refuse to believe in them. If we are living in the most peaceful time in history, then why are there so many wars in the world right now? Why do we hear the news every day that someone has been killed or raped somewhere? Why is there so often terrorist attacks and destruction? Welcome to the availability heuristic.
The answer lies in the fact that we live in a world where every event immediately becomes known to everyone. Information about a disaster or crime is more widely available than ever before. Go online and you will find as much information about recent events as could hardly have fit in one issue of a newspaper a hundred years ago.
The overall percentage of dangerous events decreases, but the likelihood that you will hear about them increases. And since information about these events is always available, our brain believes that they occur with a greater frequency than they actually are.
We overestimate the impact of what we remember and underestimate the prevalence of events that we have not heard of.
Anchoring effect (anchors)
There is a fast food cafe not far from my house that sells delicious burgers with cheese. The menu reads in large letters: "FOR ONE BURGER YOU CAN CHOOSE MAXIMUM 6 KINDS OF CHEESE".
My first thought: this is absurd. Who wants to order a six-cheese burger?
Second thought: what six types of cheese would I choose?
I didn't think about how ingenious cafe owners are until I learned about the anchoring effect. You see, when ordering a burger here, I usually chose one type of cheese. But after I read “MAXIMUM 6 KINDS OF CHEESE FOR ONE BURGER”, my brain became attached to the fact that you can order more cheese than usual.
Most people will not order six types of cheese, but this link is enough to move from one slice to two or three, thus increasing the cost of a burger by a couple of bucks.
This effect is often used commercially. For example, businessmen have found that if you set a limit, for example, "12 pieces of goods per hand," then people will buy twice as much as usual.
But perhaps the most common area where anchoring is applied is in pricing. If you see a $ 500 price tag on a watch in a store, you will find it too expensive for your budget. However, if, entering the store, you first see a watch for $ 5,000, and then - for $ 500, then the price for the latter will seem quite reasonable to you. Most premium products play a very important role: they make mid-range products appear cheaper than they actually are.
5. Inclination to confirm your point of view
Confirmation bias is the tendency to seek or favor information that confirms our beliefs, while at the same time ignoring or devaluing what contradicts them.
For example, Person A believes that climate change is a serious problem, so he only searches for and reads articles and books on environmental conservation, climate change and renewable energy sources. As a result, Person A continues to validate and reinforce their current beliefs.
In turn, Person B does not believe that climate change is a serious problem, so he searches and reads only those materials in which climate change is called a myth. As a result, Person B continues to validate and reinforce their current beliefs.
Changing your point of view is not as easy as it seems. The longer you believe in something, the more you ignore and filter all the opposite information.
Another example. If you have just bought a Honda Accord, considering it the best car on the market, then of course you will only read articles that praise this car. Meanwhile, if you come across information in some magazine that the car of the year was chosen, for example, the Chevrolet Impala, you will reject it, consider it a mistake, or find some other excuse.
Most people do not want new information; they seek to validate what they already know.
After reading this article, the question will arise: how to get the brain not to make these mistakes?
For starters, don't think of them as signs that your brain is not working properly. View them as evidence that the labels used by the brain are not always beneficial. There are many areas of daily life where the mental processes mentioned above are incredibly beneficial, so you shouldn't get rid of them.
The problem is that our brains perform these functions so well that we end up using them in situations in which they manifest themselves negatively. In such cases, self-awareness is one of the best solutions to the problem.
We are able to make good decisions from time to time, but most of the time we make strange, irrational choices based on our emotions. Factrum publishes an article describing the five most common mental mistakes that constantly hinder our decision-making.
1. Survivor bias
Virtually all popular online media today are filled with survivorship bias. Headlines like “8 Things Successful People Do Every Day,” “The Best Tips Richard Branson Ever Got,” or “How LeBron James Trains in the Offseason,” are survivor bias in action.
Survivor bias refers to our tendency to focus on the winners in a particular area and learn from them, while completely forgetting about the losers who used the same strategy.
There are thousands of athletes who train in the same way as LeBron James, but they failed to make it to the NBA. The problem is that no one has heard of the thousands of athletes who have failed to reach the top. We only hear about people who “survived”. We mistakenly overestimate the strategies, tactics, and advice of one survivor, ignoring the fact that they don't work for most people. Another example: “Richard Branson, Bill Gates and Mark Zuckerberg dropped out of school and became billionaires! You don't need school to be successful. Entrepreneurs just need to stop wasting time studying and get busy."
For each Branson, Gates and Zuckerberg, there are several thousand other entrepreneurs who have failed, got into debt and left with an incomplete education. The survivor's systematic errors indicate that we do not know how this or that strategy will manifest itself specifically in our case. Since the winners are often remembered and the losers are forgotten altogether, it becomes very difficult to determine whether a particular strategy will lead to success or not.
2. Fear of loss
Loss aversion refers to our tendency to resolutely avoid losses on the way to making a profit. Research shows that if someone gives you $ 10, you will experience a small increase in satisfaction. But if you lose $ 10, you will experience a significantly higher loss of satisfaction. Yes, the reactions are opposite, but they are equal in magnitude.
Our tendency to avoid losses forces us to make stupid decisions and change our behavior just in order to preserve the things that we already have. We strive to protect the things we have, and this can lead to the fact that we overestimate them in comparison with other possible options.
For example, if you buy new shoes, it will give you a small boost in your enjoyment. If you have never been able to put on these shoes and decided to sell them after a few months, then this step will most likely be incredibly painful for you. You have never worn them, but for some reason you cannot part with them. Fear of loss. Likewise, you can feel a little bit of joy when all the traffic lights turn green for you on the way to work, but if the driver in front of you hesitates and you miss the opportunity to slip into the green light, you will feel angry ... The pain of the loss of opportunity is much stronger than the pleasure that occurred in the beginning.
3. Availability heuristic
The availability heuristic is a very common mistake our brains make in assuming that the examples that come to our minds are the most important or prevalent things.
Research by Stephen Pinker of Harvard University has shown that we are living in the least violent time in human history. There are many more people living in the world today than ever before. Homicide, rape, sexual harassment and child abuse have been steadily declining.
Many people are surprised when they hear these statistics. Some still refuse to believe in them. If we are living in the most peaceful time in history, then why are there so many wars in the world right now? Why do we hear the news every day that someone has been killed or raped somewhere? Why is there so often terrorist attacks and destruction? Welcome to the availability heuristic.
The answer lies in the fact that we live in a world where every event immediately becomes known to everyone. Information about a disaster or crime is more widely available than ever before. Go online and you will find as much information about recent events as could hardly have fit in one issue of a newspaper a hundred years ago.
The overall percentage of dangerous events decreases, but the likelihood that you will hear about them increases. And since information about these events is always available, our brain believes that they occur with a greater frequency than they actually are.
We overestimate the impact of what we remember and underestimate the prevalence of events that we have not heard of.
Anchoring effect (anchors)
There is a fast food cafe not far from my house that sells delicious burgers with cheese. The menu reads in large letters: "FOR ONE BURGER YOU CAN CHOOSE MAXIMUM 6 KINDS OF CHEESE".
My first thought: this is absurd. Who wants to order a six-cheese burger?
Second thought: what six types of cheese would I choose?
I didn't think about how ingenious cafe owners are until I learned about the anchoring effect. You see, when ordering a burger here, I usually chose one type of cheese. But after I read “MAXIMUM 6 KINDS OF CHEESE FOR ONE BURGER”, my brain became attached to the fact that you can order more cheese than usual.
Most people will not order six types of cheese, but this link is enough to move from one slice to two or three, thus increasing the cost of a burger by a couple of bucks.
This effect is often used commercially. For example, businessmen have found that if you set a limit, for example, "12 pieces of goods per hand," then people will buy twice as much as usual.
But perhaps the most common area where anchoring is applied is in pricing. If you see a $ 500 price tag on a watch in a store, you will find it too expensive for your budget. However, if, entering the store, you first see a watch for $ 5,000, and then - for $ 500, then the price for the latter will seem quite reasonable to you. Most premium products play a very important role: they make mid-range products appear cheaper than they actually are.
5. Inclination to confirm your point of view
Confirmation bias is the tendency to seek or favor information that confirms our beliefs, while at the same time ignoring or devaluing what contradicts them.
For example, Person A believes that climate change is a serious problem, so he only searches for and reads articles and books on environmental conservation, climate change and renewable energy sources. As a result, Person A continues to validate and reinforce their current beliefs.
In turn, Person B does not believe that climate change is a serious problem, so he searches and reads only those materials in which climate change is called a myth. As a result, Person B continues to validate and reinforce their current beliefs.
Changing your point of view is not as easy as it seems. The longer you believe in something, the more you ignore and filter all the opposite information.
Another example. If you have just bought a Honda Accord, considering it the best car on the market, then of course you will only read articles that praise this car. Meanwhile, if you come across information in some magazine that the car of the year was chosen, for example, the Chevrolet Impala, you will reject it, consider it a mistake, or find some other excuse.
Most people do not want new information; they seek to validate what they already know.
After reading this article, the question will arise: how to get the brain not to make these mistakes?
For starters, don't think of them as signs that your brain is not working properly. View them as evidence that the labels used by the brain are not always beneficial. There are many areas of daily life where the mental processes mentioned above are incredibly beneficial, so you shouldn't get rid of them.
The problem is that our brains perform these functions so well that we end up using them in situations in which they manifest themselves negatively. In such cases, self-awareness is one of the best solutions to the problem.
