Browse & Filter Biases
Showing 199 biases.
- "" ""Recycle3. Focus on objective pros/cons and your own needs.","1. Social Cohesion & Norms: Essential for society. This bias is why positive social norms (e.g. > ""Don't litter
- "" and family loyalty. It makes people want to help3. Actively build diverse teams and ""in-groups.""","1. Team Cohesion & Loyalty: This is the basis of teamwork > ""esprit de corps
- ""A 'bonus' is just 'income' and should go toward my 'savings' goal"").","1. Budgeting & Saving: This can be harnessed for good. You intentionally create a mental ""account"" (e.g.2. Create a rational budget based on goals > not on the source of the money (e.g.
- ""authentic"" brand story (e.g.2. Judge people based on their skills and actions > not their perceived ""nature"" or ""essence.""","1. Brand Identity: Can be used to create a powerful
- ""blowing on the dice2. Sports/Performance: A ""lucky ritual"" (which is an illusion of control) can reduce anxiety and increase confidence > which can lead to better performance.","1. Gambling: A gambler believes their rituals (e.g.
- ""Company X is innovative2. Recognize that a group's decision (often a compromise) may not reflect the true belief of any single member.","1. Brand Identity: Allows us to form a coherent > simple image of a group or company (e.g.
- ""Guitar seems easy!""). This initial overconfidence is a motivator to get started.","1. The ""Loudest3. Everyone: ""The more you learn > the more you realize how much you don't know.""","1. Confidence to Start: The initial ""peak of Mt. Stupid"" is what gives a beginner the confidence to start a new hobby or task (e.g.
- ""I'll put half this muffin on a plate and put the rest away"").","1. Motivation & Completion: This is a powerful motivator. The desire to finish the ""unit"" (e.g.2. Sub-divide the ""unit"" into smaller > more rational portions before you start. (e.g.
- ""If the glove doesn't *fit2. Re-state the rhyming phrase in plain > non-rhyming language to see if it still sounds true. (e.g.
- ""increase sales by 10%"") can mobilize a team effectively.","1. Personal Finance: Believing that getting a small raise will make you much happier2. Goal Setting: Focusing on a single > clear goal (e.g.
- ""messages"" in tea leaves2. Mnemonic Devices: Intentionally finding a pattern (e.g. > a ""face"" in a map) can make a random shape easier to remember.","1. Pseudoscience/Superstition: Claiming to see ""faces"" on Mars
- ""pilot programs"") to turn an ""unknown"" probability into a ""known"" one.","1. Safety & Prudence: Choosing the ""known"" option (e.g.2. Take small > calculated risks (e.g.
- ""The best part of waking up is Folgers in your cup"") is a positive use for a brand.","1. Legal/Jury Manipulation: As in the O.J. Simpson trial2. Advertising: Creating a memorable > rhyming slogan (e.g.
- a ""gym buddy"") can motivate you to stick to your goals.","1. Skewed Data: When evaluating employee performance2. Accountability: Knowing you are being observed (e.g. > by a boss
- a fire) than more commonNot Enough Meaning,We tend to find stories and patterns even when looking at sparse data,Neglect of probability,https://en.wikipedia.org/wiki/Neglect_of_probability,The tendency to completely disregard probability when making a decision under uncertainty.,"An employee might be more afraid of a rare > dramatic workplace accident (e.g.
- a highly stressed individual might incorrectly attribute a minor business error they made to ""bad luck"" or external forces beyond their controlNot Enough Meaning,We think we know what other people are thinking,Illusion of external agency,https://en.wikipedia.org/wiki/Illusion_of_external_agency,"The experience of an action being willed or chosen by oneself is retrospectively attributed to an external agent. (Less common in typical business > more psychopathological).","While less directly applicable to typical business
- a majority of employees might rate themselves as ""above averageNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Lake Wobegone effect,https://en.wikipedia.org/wiki/Lake_Wobegon#The_Lake_Wobegon_effect,A natural human tendency to overestimate one's capabilities; a specific form of illusory superiority.,"In performance self-appraisals
- a manager might assume any concession made to the other party is a direct loss for their companyNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,Zero sum bias,https://en.wikipedia.org/wiki/Zero-sum_thinking,"A cognitive bias which describes a person's tendency to view a situation as zero-sum (i.e. > one person's gain is another's loss).","In negotiations
- a manager might implicitly associate older workers with lower adaptability to new technologyWhat Should We Remember?,We discard specifics to form generalities,Implicit stereotypes,https://en.wikipedia.org/wiki/Implicit_stereotype,"Learned > automatic associations between social groups and attributes.","Even if explicitly disavowed
- a manager might unknowingly use gender-stereotypical languageWhat Should We Remember?,We discard specifics to form generalities,Stereotypical bias,https://en.wikipedia.org/wiki/Implicit_stereotype,"(Often used interchangeably with implicit stereotype) Acting on stereotypical beliefs > often unconsciously.","During performance reviews
- a robin has wings."" This feels right and is logically sound).","1. Poor Reasoning: Accepting a bad3. Actively try to find flawed logic for conclusions you like.","1. Cognitive Efficiency: Allows us to quickly accept conclusions that fit with our existing knowledge of the world. (e.g. > ""All birds have wings. A robin is a bird. Therefore
- a speaker might struggle to recall a specific term or nameWhat Should We Remember?,We store memories differently based on how they were experienced,Tip of the tongue phenomenon,https://en.wikipedia.org/wiki/Tip_of_the_tongue,"The phenomenon of failing to retrieve a word from memory > combined with partial recall and the feeling that retrieval is imminent.","During a presentation
- achieving ""zero-risk"" (e.g.3. Ask: ""Is this the best use of my (limited) resources?""","1. Peace of Mind: In some cases (e.g. > product safety)
- actionNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Escalation of commitment,https://en.wikipedia.org/wiki/Escalation_of_commitment,"A human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision
- activists3. Accept that two smart > informed people can reach different conclusions.","1. Conviction & Action: A strong belief that ""I am right"" and ""I see things clearly"" is a powerful motivator for leaders
- affecting time estimates.","Events from a year ago feel like they happened recentlyNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Telescoping effect,https://en.wikipedia.org/wiki/Telescoping_effect,The tendency to displace recent events backward in time and remote events forward in time.,"When planning a project > a manager might remember a similar past project as being more recent than it was (backward telescoping) or an older project as less distant (forward telescoping)
- and actionable feedback.","1. Entertainment: Horoscopes2. Seek specific > behavioral
- and avoid irreversible decisions",Decoy effect,https://en.wikipedia.org/wiki/Decoy_effect,The phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.,"A software company offers three subscription tiers: Basic ($10)Need To Act Fast,"To avoid mistakes > we aim to preserve autonomy and group status
- and avoid irreversible decisions",Reactance,https://en.wikipedia.org/wiki/Reactance_(psychology),"An unpleasant motivational arousal (reaction) to offersNeed To Act Fast,"To avoid mistakes > we aim to preserve autonomy and group status
- and avoid irreversible decisions",Reverse psychology,https://en.wikipedia.org/wiki/Reverse_psychology,"A technique involving the assertion of a belief or behavior that is opposite to the one desiredNeed To Act Fast,"To avoid mistakes > we aim to preserve autonomy and group status
- and avoid irreversible decisions",Status quo bias,https://en.wikipedia.org/wiki/Status_quo_bias,"A preference for the current state of affairs. The current baseline (or status quo) is taken as a reference pointNeed To Act Fast,"To avoid mistakes > we aim to preserve autonomy and group status
- and better health outcomes.","1. Failed Planning (Planning Fallacy): ""This project will be easy2. Mental Health: Optimism is highly correlated with happiness > resilience
- and dangers (e.g.3. Reframe failures as ""learning opportunities.""","1. Risk Management & Safety: This bias is essential for survival. It makes us pay immediate and serious attention to threats > risks
- and focus2. Self-Correction: A speaker who feels their nervousness is obvious might (positively) slow down > take a breath
- and limitations of the new idea.","1. Early Adoption: This bias is what drives innovation. It's the optimism needed for ""early adopters"" to try a new3. Actively list the downsides > risks
- and prior histories",Argument from fallacy,https://en.wikipedia.org/wiki/Argument_from_fallacy,"The formal fallacy of analyzing an argument and inferring thatNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Automation bias,https://en.wikipedia.org/wiki/Automation_bias,"The tendency to depend excessively on automated systems and trust their outputsNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Bandwagon effect,https://en.wikipedia.org/wiki/Bandwagon_effect,The tendency to do or believe things because many other people do or believe the same.,"A company adopts a new technology trend primarily because all its competitors are doing soNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Functional fixedness,https://en.wikipedia.org/wiki/Functional_fixedness,A cognitive bias that limits a person to using an object only in the way it is traditionally used.,"An engineering team fails to solve a design problem because they only consider using a component for its intended purposeNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Group attribution error,https://en.wikipedia.org/wiki/Group_attribution_error,"The tendency to believe that the characteristics of an individual group member are reflective of the group as a wholeNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Just–world hypothesis,https://en.wikipedia.org/wiki/Just-world_hypothesis,The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that person.,"Blaming an employee for a layoff by assuming they must have done something to deserve itNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Moral credential effect,https://en.wikipedia.org/wiki/Self-licensing,(Also Self-licensing) The phenomenon whereby a person's good deeds or ethical behavior in one area can lead them to feel justified in acting less ethically in another.,"A company that makes a significant charitable donation might feel justified in cutting corners on environmental regulationsNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Placebo effect,https://en.wikipedia.org/wiki/Placebo,A phenomenon in which a sham or simulated medical intervention can sometimes improve a patient's condition simply because the person has the expectation that it will be helpful.,"Employees report increased productivity after a new office wellness program is introducedNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Stereotyping,https://en.wikipedia.org/wiki/Stereotype,A generalized belief about a particular category of people.,"Assuming an older employee is less proficient with new technologyNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and prior histories",Ultimate attribution error,https://en.wikipedia.org/wiki/Ultimate_attribution_error,"An in-group member's tendency to make internal attributions for their group's successes and external attributions for their group's failuresNot Enough Meaning,"We fill in characteristics from stereotypes > generalities
- and special2. In-Group Cohesion: Reinforces the feeling that your group is unique > diverse
- and they design a product that fails with their actual (e.g.2. Action: ""Everyone agrees this is a problem"" (even if they don't) is a strong motivator to take collective action.","1. Failed Product Design: A team of young > urban designers assumes ""everyone"" (the false consensus) values the same features they do
- and thinkers to break from the ""old"" and explore ""new"" (and potentially better) ideas.","1. ""Shiny Object Syndrome"" (Business): A company wastes millions chasing every ""new"" technology or management fad2. Creativity: Motivates artists > designers
- and to strengthen their support for their original stance when challenged.","When presented with data showing a favored business strategy is underperformingNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Backfire effect,https://en.wikipedia.org/wiki/Confirmation_bias#backfire_effect,"The tendency of some people to resist accepting evidence that conflicts with their beliefs
- argue their point for them).","1. Motivation & Ownership: Overestimating your own contribution can make you feel a stronger sense of ownership and pride in a project3. When in conflict > try to ""steelman"" the other person's perspective (i.e.
- as ""swiping"" feels the same for $1 or $10002. To track spending > use a card or app
- as long as it's not mistaken for data.","1. ""Junk Science"" / Marketing: ""3 out of 4 doctors agree!"" (when the company only asked 4 doctors). Using a small2. Anecdotes: A powerful story from one customer (tiny sample) can be a useful > motivating tool
- Aviation2. Cognitive Unloading: Frees up mental resources. A pilot trusts the autopilot for level flight > allowing them to focus on higher-level tasks like navigation and weather.","1. Accidents (e.g.
- because the familiar trip seems quicker.","1. Use objective tools (e.g.Not Enough Meaning,We imagine things and people we're familiar with or fond of as better,Well–traveled road effect,https://en.wikipedia.org/wiki/Well_travelled_road_effect,The tendency to underestimate the time it takes to traverse a familiar route and overestimate the time it takes to traverse an unfamiliar route.,"An experienced project manager might underestimate the time needed for routine project tasks they've done many times before > leading to overly optimistic deadlines.","You underestimate the time to drive your usual route but overestimate the time for a new route
- becoming more careful where they sense greater risk and less careful if they feel more protected.","After installing advanced safety features in company vehiclesNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Risk compensation,https://en.wikipedia.org/wiki/Risk_compensation,"A theory which suggests that people typically adjust their behavior in response to the perceived level of risk
- behaviorNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Trait ascription bias,https://en.wikipedia.org/wiki/Trait_ascription_bias,"The tendency for people to view themselves as relatively variable in terms of personality
- beliefsNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",False consensus effect,https://en.wikipedia.org/wiki/False_consensus_effect,"An attributional type of cognitive bias whereby people tend to overestimate the extent to which their opinions
- believing a specific ad campaign is effectiveToo Much Information,We are drawn to details that confirm our own existing beliefs,Congruence bias,https://en.wikipedia.org/wiki/Congruence_bias,"A type of confirmation bias; the tendency to test hypotheses exclusively through direct testing > instead of testing possible alternative hypotheses.","A marketing team
- believing in their potential while (temporarily) disregarding their high risk of failure.","1. Chasing Trends (""Shiny Object Syndrome""): A company wastes millions jumping onto every ""new"" trend (e.g.2. Investment (VC): Venture capitalists need this bias to invest in new > revolutionary ideas
- believing it to be originalWhat Should We Remember?,We edit and reinforce some memories after the fact,Cryptomnesia,https://en.wikipedia.org/wiki/Cryptomnesia,"Occurs when a forgotten memory returns without its being recognized as such by the subject > who believes it is something new and original.","An employee proposes an idea in a brainstorming session
- believing it will revolutionize their industryNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Pro–innovation bias,https://en.wikipedia.org/wiki/Pro-innovation_bias,The tendency to have an excessive optimism towards an invention or innovation's usefulness and a disregard for its limitations and weaknesses.,"A company invests heavily in a new > unproven technology
- bills).","Consumers might be more willing to make several small purchases with loose change or small bills than to break a large bill for a singleNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,Denomination effect,https://en.wikipedia.org/wiki/Denomination_effect,"The tendency to spend more money when it is denominated in small amounts (e.g. > coins) rather than large amounts (e.g.
- brand or product in one area to positively influence one's opinion or feelings in other areas.","A well-dressedNot Enough Meaning,We imagine things and people we're familiar with or fond of as better,Halo effect,https://en.wikipedia.org/wiki/Halo_effect,"The tendency for positive impressions of a person > company
- but are in fact vague and general enough to apply to a wide range of people.","Employees might readily accept generic feedback from a personality test used in a corporate workshop as highly accurate and specific to themNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Forer effect,https://en.wikipedia.org/wiki/Barnum_effect,"(Also Barnum effect) The observation that individuals will give high accuracy ratings to descriptions of their personality that supposedly are tailored specifically for them
- but blames a failed project on lack of resources or uncooperative colleagues.","When you pass an examNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Self–serving bias,https://en.wikipedia.org/wiki/Self-serving_bias,The tendency to attribute successes to internal factors and failures to external factors.,"An employee credits their successful project to their own hard work and skills
- but criticizes other managers for favoring candidates from their own alma materToo Much Information,We notice flaws in others more easily than we notice flaws in ourselves,Bias blind spot,https://en.wikipedia.org/wiki/Bias_blind_spot,"The cognitive bias of recognizing the impact of biases on the judgment of others > while failing to see the impact of biases on one's own judgment.","A manager believes they make hiring decisions completely objectively
- but does this whole project feel like a $1M project?"" It can catch errors in the ""parts"" analysis.","1. Under-estimation: A manager estimates the whole project will take ""about 6 months."" But when the team adds up the parts (design=3mo2. Trust the sum of the (realistically estimated) parts > not your ""gut"" feeling about the whole.","1. Holistic Assessment: Can be a positive check. ""The parts add up to $1M
- but it will harm them.""","1. Underestimating Risk: ""I can look at this disinformation/propaganda2. Censorship (Positive?): This bias is the reasoning behind ""protecting"" vulnerable groups (e.g. > children) from certain media. ""It won't affect me
- but it's high-risk.","1. Discrimination & Prejudice: The overtly negative use. Making decisions about hiring3. Be aware of your own implicit associations and consciously work to counter them.","1. Cognitive Efficiency: Stereotypes (as general heuristics) are mental shortcuts. They are the starting point for how our brain categorizes and makes sense of a complex world (e.g. > ""A person in a white coat in a hospital is probably a doctor""). The positive use is efficiency
- but not between 51 and 52 candles.","1. To assess changeToo Much Information,We notice when something has changed,Weber–Fechner law,https://en.wikipedia.org/wiki/Weber–Fechner_law,Two related psychophysical laws quantifying the perception of change in a given stimulus. The law states that the change in a stimulus that will be just noticeable is a constant ratio of the original stimulus.,"A price increase from $1 to $2 on a small item is highly noticeable > but a price increase from $1000 to $1001 on a large purchase might not be perceived as significant by consumers.","You notice a difference between 1 and 2 candles in a dark room
- but not evaluated together.","A company offering a high-quality product with fewer features might be perceived more favorably than a product with many featuresNeed To Act Fast,"We favor simple–looking options and complete information over complex > ambiguous options",Less–is–better effect,https://en.wikipedia.org/wiki/Less-is-better_effect,"A type of preference reversal that occurs when the lesser or smaller alternative of a proposition is preferred when evaluated separately
- but we had fun!"").","1. ""Good Old Days"" Fallacy: Leads to ""declinism"" (see below) and a refusal to accept positive new changes2. Social Bonding: Teams and families bond by ""rosily"" remembering past shared struggles (e.g. > ""Remember that terrible project? It was awful
- can give team members a common language and make them feel validated.","1. Astrology2. Team Building: A personality assessment (like DiSC or Myers-Briggs) > even if vague
- creative idea or a scientific hypothesis (which is then tested).","1. Stereotyping & Prejudice: Believing that a certain minority group is associated with a negative behavior (e.g.2. Actively look for disconfirming examples (e.g. > times A happened without B).","1. Creativity & Hypothesis Generation: Seeing a (false) connection between two unrelated things can be the spark for a new
- custom fit for the company's needs.","1. Waste & Inefficiency: A company spends 12 months and $1 million building a ""new"" software tool from scratch... when they could have bought a better2. Security/Customization: In some cases > building a tool internally is better for security or for creating a perfect
- dense communication between two experts3. Have a ""beginner"" (e.g. > someone from another department) review your communication for clarity. 4. Use simple analogies.","1. Expert-to-Expert Communication: Allows for highly efficient
- despite new research showing they are beneficialToo Much Information,We notice when something has changed,Conservatism,https://en.wikipedia.org/wiki/Conservatism_(belief_revision),The tendency to revise one's belief insufficiently when presented with new evidence.,"A company is slow to adapt to new market trends > under-reacting to clear data indicating a shift in consumer preferences because it conflicts with long-held beliefs about their customer base.","You are reluctant to update your belief that eggs are unhealthy
- especially if they are minor.","1. Decision Analysis: In a side-by-side comparison (like a feature checklist for two software)2. Focus on the absolute value of each option > not the relative differences
- established companies to ""go obsolete"" by ignoring new market trends or technologies (e.g.2. Brand Identity: Helps a company maintain a consistent > reliable brand identity over decades.","1. Failed Innovation: Causes large
- even if it means working late and sacrificing qualityNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Unit bias,https://en.wikipedia.org/wiki/List_of_cognitive_biases,The tendency to want to finish a given unit of a task or item. Strong effects on the consumption of food in particular.,"An employee might feel compelled to finish an entire report in one sitting
- even if it's objectively reasonableNot Enough Meaning,We imagine things and people we're familiar with or fond of as better,Reactive devaluation,https://en.wikipedia.org/wiki/Reactive_devaluation,A cognitive bias that occurs when a proposal is devalued if it appears to originate from an antagonist.,"During union negotiations > management might immediately dismiss a proposal from the union
- even if objective data (e.g.3. Track your predictions to see how often your ""gut"" is actually correct.","1. Confidence & Leadership: A leader who feels their plan is valid (even if it's an illusion) can project confidence > which is essential for motivating a team to execute it.","1. Hiring: An interviewer who believes they are a great ""judge of character"" will trust their ""gut feeling"" after an interview
- even if you make a later mistake.","1. Politics/Disinformation: A false2. First Impressions: A strong > positive first impression continues to influence how people see you
- even though market movements are largely outside their control.","You roll dice gentlyNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Illusion of control,https://en.wikipedia.org/wiki/Illusion_of_control,The tendency for people to overestimate their ability to control events.,"An investor might believe their specific trading rituals or routines directly influence stock market performance
- even when they already have sufficient information to actNeed To Act Fast,"We favor simple–looking options and complete information over complex > ambiguous options",Information bias,https://en.wikipedia.org/wiki/Information_bias_(psychology),The tendency to seek information even when it cannot affect action.,"A manager might spend excessive time gathering more data and reports before making a decision
- Expectation bias)","In a performance reviewToo Much Information,We are drawn to details that confirm our own existing beliefs,Observer–expectancy effect,https://en.wikipedia.org/wiki/Observer-expectancy_effect,"A form of reactivity in which a researcher's cognitive bias causes them to subconsciously influence the participants of an experiment. (Also Experimenter's bias > Observer effect
- experiences2. Try to evaluate information from a neutral > third-person perspective.","1. Education: Teachers help students remember information by connecting it to their own lives
- Fading affect biasWhat Should We Remember? > We discard specifics to form generalities
- fatigue2. Personal Health: Acknowledging the gap helps you set up systems (e.g. > not buying junk food) to protect your ""hot state"" self.","1. Negotiation: Exploiting an opponent's ""hot state"" (e.g.
- favorToo Much Information,We are drawn to details that confirm our own existing beliefs,Confirmation bias,https://en.wikipedia.org/wiki/Confirmation_bias,"The tendency to search for > interpret
- features).","1. Team Pride & Ownership: Can foster a strong2. Evaluate all options (internal and external) using the same objective criteria (cost > time
- fire alarmsNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,Normalcy bias,https://en.wikipedia.org/wiki/Normalcy_bias,A cognitive bias which leads people to disbelieve or minimize threat warnings.,"Business leaders might ignore early signs of a significant market disruption or economic downturn > assuming things will continue as they always have.",You don't prepare for a severe storm because in your memory storms have never caused serious damage where you live.,"1. Take all warnings (e.g.
- goals.","1. Competitive Strategy: In a true zero-sum situation (e.g.3. Assume the other party has different > not just opposing
- help from others) that contributed.","1. Self-Esteem & Resilience: This bias protects our self-esteem. By attributing failure to external factors (""The test was unfair"")2. When you succeed > actively write down the external factors (luck
- hoping they will recoverNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Loss aversion,https://en.wikipedia.org/wiki/Loss_aversion,The tendency to prefer avoiding losses to acquiring equivalent gains: it's better to not lose $5 than to find $5.,"Investors might hold onto losing stocks too long
- housing3. Consciously focus on individual characteristics > not group affiliation.",1. Storytelling: Can be used as a cognitive shortcut to quickly establish a character's role or background for an audience (though this is often a sign of lazy writing).,"1. Discrimination: Justifying unequal treatment in hiring
- iCloud3. Wait to form a global impression until after you've assessed all parts.","1. Brand Building (""Brand Halo""): A company makes one fantastic product (e.g. > the first iPhone). This positive impression ""shines"" on all their other products (e.g.
- if the future value isn't there.","1. Commitment & Grit: This is the bias that gets you through a difficult task. The belief that the result will be worth the effort (and over-valuing it) is what motivates you to finish a Ph.D.2. Be willing to abandon a project > even after huge effort
- in a lecture) might lead to better recall for the last few points compared to information presented purely visually (e.g.What Should We Remember?,We reduce events and lists to their key elements,Modality effect,https://en.wikipedia.org/wiki/Modality_effect,How learner performance depends on the presentation mode of studied items. Often refers to better recall of end-of-list items when presented aurally versus visually.,"In training > information presented verbally (e.g.
- in a way that statistics on police brutality never could.","1. Misallocation of Resources: We spend millions to save one ""identifiable victim"" (e.g.2. Social Justice: One story (e.g. > the ""story"" of George Floyd) can ignite a massive movement for social change
- in relation to the same qualities and abilities of other persons.","A manager might believe they are a better leader or more skilled than their peersNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Illusory superiority,https://en.wikipedia.org/wiki/Illusory_superiority,"A cognitive bias whereby a person overestimates their own qualities and abilities
- in sports2. Do not change a sound > long-term strategy based on a short-term ""hot streak.""","1. Motivation & Confidence: Believing you are ""on a roll"" (e.g.
- influenced by Murphy's LawNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,Murphy's Law,https://en.wikipedia.org/wiki/Murphy's_law,"The adage that ""anything that can go wrong will go wrong."" While not strictly a cognitive bias > it reflects a pessimistic expectation that can influence planning.","A project manager
- interpret2. Expertise: A trained specialist (e.g. > radiologist) perceives patterns and anomalies in an X-ray that a layperson cannot see.","1. Stereotyping & Prejudice: People see
- investing more time and resources in trainingNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Irrational escalation,https://en.wikipedia.org/wiki/Escalation_of_commitment,(Related to Sunk Cost Fallacy and Escalation of Commitment) Making irrational decisions to justify actions already taken.,"A manager continues to support a poorly performing employee they hired
- irrationalToo Much Information,We notice flaws in others more easily than we notice flaws in ourselves,Naïve realism,https://en.wikipedia.org/wiki/Naïve_realism_(psychology),"The human tendency to believe that we see the world around us objectively > and that people who disagree with us must be uninformed
- it is ""due"" for an increaseNot Enough Meaning,We tend to find stories and patterns even when looking at sparse data,Gambler's fallacy,https://en.wikipedia.org/wiki/Gambler's_fallacy,"The mistaken belief that if something happens more frequently than normal during a given period > it will happen less frequently in the future (or vice versa).","An investor believes that because a stock has gone down for three consecutive days
- it leads."" News outlets focus on negative2. Quality Assurance: A QA tester is paid to find the ""negative"" (bugs) > which is crucial for improving product quality.","1. Media: ""If it bleeds
- keeping the number of primary choices around 5-9 can enhance usability and reduce cognitive overload.","You can remember roughly 7 items in a list without writing them downNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,The magical number 7 ± 2,"https://en.wikipedia.org/wiki/The_Magical_Number_Seven > _Plus_or_Minus_Two",George A. Miller's observation that the number of objects an average human can hold in working memory is 7 ± 2.,"When designing a product menu or a list of options for customers
- law3. Set a deadline for information-gathering and then make the decision.","1. Thoroughness & Due Diligence: In some fields (e.g. > science
- lazy decisions"" that succeeded due to good luck.","1. Action & Risk-Taking: Can (positively) encourage risk-taking. If a good outcome is all that matters2. Reward ""good > well-reasoned decisions"" that failed due to bad luck. Punish ""bad
- leading to diet failure.","You overestimate your self-control around dessert and keep cake in the houseNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Restraint bias,https://en.wikipedia.org/wiki/Restraint_bias,The tendency to overestimate one's ability to show restraint in the face of temptation.,"An employee starting a diet might keep unhealthy snacks at their desk > overestimating their ability to resist them during a stressful workday
- Levels–of–processing effectWhat Should We Remember? > We store memories differently based on how they were experienced
- making them feel certain of overall successNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Pseudocertainty effect,https://en.wikipedia.org/wiki/Pseudocertainty_effect,The tendency for people to perceive an outcome as certain when it is actually uncertain in multi-stage decision making.,"A business might choose a strategy that guarantees a small positive outcome in an initial phase
- methodToo Much Information,We notice things already primed in memory or repeated often,Availability heuristic,https://en.wikipedia.org/wiki/Availability_heuristic,"A mental shortcut relying on immediate examples that come to mind when evaluating a specific topic > concept
- military boot camp2. Group Cohesion: Groups that go through a hard > effortful initiation (e.g.
- money or effort)Need To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Sunk cost fallacy,https://en.wikipedia.org/wiki/Sunk_cost#Loss_aversion_and_the_sunk_cost_fallacy,"Continuing a behavior or endeavor as a result of previously invested resources (time
- more diligently) simply because they know they are being observedToo Much Information,We are drawn to details that confirm our own existing beliefs,Observer effect,https://en.wikipedia.org/wiki/Observer-expectancy_effect,"(Can refer to Observer-expectancy effect or the effect of being observed changing behavior) - In this context > likely refers to the former due to grouping.","A consultant evaluating a company's workflow might find that employees behave differently (e.g.
- musician3. Be cautious of memories that feel ""source-less.""","1. Creativity (Unintentional): You misattribute an idea you heard elsewhere as your own original thought. This is plagiarism (Cryptomnesia) > but it can also be the spark for a new train of thought.","1. Plagiarism (Unintentional): A writer
- not a ""failure.""","1. Grit & Perseverance: This bias keeps you going. It's the ""I've already come this far3. ""Cut your losses."" Re-frame quitting as a smart > brave decision
- not just which one has a better-looking graphic.","1. Education & Communication: Using diagrams2. When comparing two claims > evaluate the evidence behind them
- not subjective interpretations.","1. Placebo Effect: A patient's expectation that a sugar pill will cure their headache can3. Focus on objective > observable data
- not the fancy packaging).","1. Retail/Experience Design: Using pleasant music3. Separate the item from its context (e.g. > judge the product
- Occam's razorNeed To Act Fast > We favor simple–looking options and complete information over complex, ambiguous options
- of perceptionToo Much Information,We notice when something has changed,Contrast effect,https://en.wikipedia.org/wiki/Contrast_effect,"The enhancement or diminishment > relative to normal
- or ""ambiguity"". People tend to select options for which the probability of a favorable outcome is knownNeed To Act Fast,"We favor simple–looking options and complete information over complex > ambiguous options",Ambiguity bias,https://en.wikipedia.org/wiki/Ambiguity_effect,"A cognitive bias where decision making is affected by a lack of information
- or behaviors) even when no such relationship exists.",A manager notices that two employees from the same university performed exceptionally well and begins to believe that hiring from that university guarantees high performers.,"You believe full moons cause strange behaviour because of a few instancesNot Enough Meaning,We tend to find stories and patterns even when looking at sparse data,Illusory correlation,https://en.wikipedia.org/wiki/Illusory_correlation,"The phenomenon of perceiving a relationship between variables (typically people > events
- or blamed for losses due to an unforeseen global crisis (bad luck)Not Enough Meaning,We project our current mindset and assumptions onto the past and future,Moral luck,https://en.wikipedia.org/wiki/Moral_luck,The phenomenon whereby an agent is assigned moral blame or praise for an action or its consequences even if it is clear that said agent did not have full control over either the action or its consequences.,"A CEO is praised for record profits driven by a sudden > unexpected market boom (good luck)
- or institutional cultures that avoid using or buying already existing productsNot Enough Meaning,We imagine things and people we're familiar with or fond of as better,Not invented here,https://en.wikipedia.org/wiki/Not_invented_here,"A stance adopted by social > corporate
- or intentions to non-human entities.","Describing a volatile stock market as ""angry"" or ""nervousNot Enough Meaning,We tend to find stories and patterns even when looking at sparse data,Anthropomorphism,https://en.wikipedia.org/wiki/Anthropomorphism#Psychology,"The attribution of human traits > emotions
- or misinterpreted memories about oneself or the worldNot Enough Meaning,We tend to find stories and patterns even when looking at sparse data,Confabulation,https://en.wikipedia.org/wiki/Confabulation,"A memory error defined as the production of fabricated > distorted
- or paradigms.","A long-established company rejects a newToo Much Information,We are drawn to details that confirm our own existing beliefs,Semmelweis reflex,https://en.wikipedia.org/wiki/Semmelweis_reflex,"The reflex-like tendency to reject new evidence or new knowledge because it contradicts established norms > beliefs
- original thought.","1. Legal System: An eyewitness unintentionally fabricates details of a crime (e.g.2. Creativity: The ""misremembering"" of one idea can blend with another > unintentionally creating a new
- others might assume it's due to their incompetence (dispositional) rather than considering potential situational factors like unclear instructions or excessive workload (situational).","When someone cuts you off in trafficNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Fundamental attribution error,https://en.wikipedia.org/wiki/Fundamental_attribution_error,The tendency for people to under-emphasize situational explanations for an individual's observed behavior while over-emphasizing dispositional and personality-based explanations.,"When a colleague makes a mistake
- our money2. Safety & Conservation: Drives us to protect what we have (our health > our family
- outdated systemWhat Should We Remember?,We reduce events and lists to their key elements,Memory inhibition,https://en.wikipedia.org/wiki/Memory_inhibition,"The ability not to remember irrelevant information > or to suppress retrieval of information that is no longer relevant.","An employee trying to learn a new software system might find it difficult to ""forget"" the procedures of an old
- painToo Much Information,We notice things already primed in memory or repeated often,Empathy gap,https://en.wikipedia.org/wiki/Empathy_gap,"A cognitive bias that causes people to underestimate the influence of visceral states (e.g. > hunger
- Peltzman effectNeed To Act Fast > To act, we must be confident we can make an impact and feel what we do is important
- political party)3. State your own opinion last in a group meeting.","1. Social Bonding: When you're with your in-group (e.g. > friends
- positive2. Mentorship: An older > experienced mentor can provide a calm
- potentially downplaying risks compared to younger colleagues.",Older adults remember more positive events than negative ones from their lives.,"1. For critical decisions (e.g.Not Enough Meaning,We imagine things and people we're familiar with or fond of as better,Positivity effect,https://en.wikipedia.org/wiki/Positivity_effect,An age-related trend that favors positive over negative stimuli in cognitive processing. Older adults tend to recall more positive than negative information.,"An older > experienced executive might focus more on past successes and positive future outlooks during strategic planning
- potentially leading to underestimation.","You estimate the total time required for several errands separately and then add them upNot Enough Meaning,We simplify probabilities and numbers to make them easier to think about,Subadditivity effect,https://en.wikipedia.org/wiki/Subadditivity_effect,The tendency to judge the probability of the whole to be less than the probabilities of the parts.,"When estimating project costs > the sum of estimates for individual tasks might be perceived as less than an overall holistic estimate of the entire project
- potentially leading to unfair blame or credit.",You vividly remember visiting a place as a child that you never actually visited.,"1. Do not trust your memory 100%. Always verify with external evidence (e.g.What Should We Remember?,We edit and reinforce some memories after the fact,False memory,https://en.wikipedia.org/wiki/False_memory,A psychological phenomenon where a person recalls something that did not happen or recalls it differently from the way it actually happened.,"During a post-project review > team members might incorrectly ""remember"" details about who was responsible for certain decisions or tasks
- potentially leading to unintentional awkwardness.",You find it harder to distinguish faces of people of races different from your own.,"1. Actively and consciously practice individuating faces from other racial groups (e.g.Not Enough Meaning,We imagine things and people we're familiar with or fond of as better,Cross–race effect,https://en.wikipedia.org/wiki/Cross-race_effect,The tendency to more easily recognize faces of the race that one is most familiar with.,"In a diverse workplace > an employee might have more difficulty recognizing and remembering names of colleagues from racial groups different from their own
- predictive model.","1. Failed Management: A manager only offers bonuses (extrinsic) to motivate a team3. Offer both (e.g. > fair pay and interesting work).","1. Economic Theory: A useful (if incomplete) assumption for large-scale economic modeling. Assuming people generally respond to financial incentives (extrinsic) is a simple
- Processing difficulty effectNeed To Act Fast > To get things done, we tend to complete things we've invested time and energy in
- proven3. Judge an idea on its evidence > not on how much it conforms to ""how we've always done it.""","1. Stability/Quality Control: This reflex upholds existing
- rather than based on the total sum or average of every moment of the experience.","A customer's overall satisfaction with a service interaction might be heavily influenced by the most positive (or negative) moment and how the interaction concludedWhat Should We Remember?,We reduce events and lists to their key elements,Peak–end rule,https://en.wikipedia.org/wiki/Peak–end_rule,"A psychological heuristic in which people judge an experience largely based on how they felt at its peak (i.e. > its most intense point) and at its end
- rather than crammed into a single intensive day.",You learn vocabulary words better by studying them a little each day rather than cramming.,"1. (This is a positive principle). To use it: Don't ""cram."" Space out your learning sessions (e.g.What Should We Remember?,We edit and reinforce some memories after the fact,Spacing effect,https://en.wikipedia.org/wiki/Spacing_effect,"The phenomenon whereby learning is greater when studying is spread out over time > as opposed to studying the same amount of content in a single session.","Employee training programs are more effective if learning modules are spaced out over several weeks with opportunities for practice
- rather than just passively reading a manual.",You remember information better when you write your own study notes than when reading someone else's.,"1. (This is a positive bias). Mitigation is not needed. To use it: Don't just give people the answer. Ask them a question that makes them generate the answer. (e.g.Need To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Generation effect,https://en.wikipedia.org/wiki/Generation_effect,The phenomenon where information is better remembered if it is generated from one's own mind rather than simply read.,"Employees are more likely to remember and understand new procedures if they are involved in co-creating or actively problem-solving related to them
- recognitionNot Enough Meaning,We think we know what other people are thinking,Extrinsic incentive error,https://en.wikipedia.org/wiki/Extrinsic_incentives_bias,The tendency to attribute others' motivations more to extrinsic incentives (like pay) and less to intrinsic incentives (like enjoyment or personal values) than is actually the case.,"A manager might assume employees are primarily motivated by salary and bonuses > underestimating the importance of job satisfaction
- regardless of the decision-making process.","You judge your decision to take a particular route as smart because there was no trafficNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Outcome bias,https://en.wikipedia.org/wiki/Outcome_bias,The tendency to judge a decision by its eventual outcome instead of based on the quality of the decision at the time it was made.,"A manager who made a risky investment that paid off is praised as a visionary > while another manager who made a similar well-reasoned risky investment that failed is criticized
- relatable thing in front of us",Appeal to novelty,https://en.wikipedia.org/wiki/Appeal_to_novelty,"A fallacy in which one prematurely claims that an idea or proposal is correct or superiorNeed To Act Fast,"To stay focused > we favor the immediate
- relatable thing in front of us",Hyperbolic discounting,https://en.wikipedia.org/wiki/Hyperbolic_discounting,The tendency for people to increasingly choose a smaller-sooner reward over a larger-later reward as the delay occurs sooner rather than later in time.,"An employee might choose a smallNeed To Act Fast,"To stay focused > we favor the immediate
- relatable thing in front of us",Identifiable victim effect,https://en.wikipedia.org/wiki/Identifiable_victim_effect,"The tendency of individuals to offer greater aid when a specificNeed To Act Fast,"To stay focused > we favor the immediate
- rhyming slogan for a business strategy (e.g.Need To Act Fast,"We favor simple–looking options and complete information over complex > ambiguous options",Rhyme–as–reason effect,https://en.wikipedia.org/wiki/Rhyme-as-reason_effect,A cognitive bias whereupon a saying or aphorism is judged as more accurate or truthful when it is rewritten to rhyme.,"A catchy
- shark attack) to the common2. Compare the rare > vivid event (e.g.
- short-duration tasks2. Remember that removing time from a small number (e.g. > 5 mins to 4 mins) is a huge percentage gain. Removing time from a large number is tiny.","1. Efficiency (in the right place): Can be used to positively focus efforts on optimizing high-frequency
- simply because they have seen advertisements for the familiar brand more frequently.","The more you listen to a new song on the radioToo Much Information,We notice things already primed in memory or repeated often,Mere–exposure effect,https://en.wikipedia.org/wiki/Mere-exposure_effect,A psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them.,"Consumers may choose a familiar brand of coffee over a new > potentially better one
- society) is mostly good and legitimate3. Imagine (and argue for) alternative systems.","1. Stability & Cohesion: This bias provides social stability. It's a ""social glue"" that prevents anarchy. It's the default belief that our current system (government > company
- straighter roads feel safer2. Do not assume ""safer"" equipment automatically leads to ""safer"" outcomes.","1. This is an observation > not a ""positive use"": It's a phenomenon that must be managed. The ""positive"" part is knowing about it. A road engineer knows that wider
- strong retrieval cues when learning (e.g.Too Much Information,We notice things already primed in memory or repeated often,Cue–dependent forgetting,https://en.wikipedia.org/wiki/Cue-dependent_forgetting,A type of forgetting that occurs when information is available in memory but cannot be recalled without appropriate retrieval cues.,An employee forgets a specific procedure learned during training until they revisit the exact training manual (the cue) where they first encountered it.,"You can't remember your childhood friend's name until someone shows you an old photo of them > which triggers the memory.","1. Actively create multiple
- superior2. Identity Formation: Can give people a strong > stable sense of self and cultural identity (""This is who I am"").","1. Racism/Sexism: The core of many prejudices. The belief that a group is inherently or naturally (by ""essence"") inferior
- team members might overvalue its final output or impactNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Effort justification,https://en.wikipedia.org/wiki/Effort_justification,The tendency to attribute a greater value (greater than the objective value) to an outcome they had to put effort into acquiring or achieving.,"After spending months on a challenging project
- terms.","Employees might feel satisfied with a 2% raise in a year with 3% inflationToo Much Information,We notice when something has changed,Money illusion,https://en.wikipedia.org/wiki/Money_illusion,"The tendency of people to think of currency in nominal > rather than real
- Testing effectWhat Should We Remember? > We store memories differently based on how they were experienced
- than equally harmful omissions (inactions).","A manager might be judged less harshly for failing to invest in a new safety feature (omission) that could have prevented an accidentToo Much Information,We notice things already primed in memory or repeated often,Omission bias,https://en.wikipedia.org/wiki/Omission_bias,"The tendency to judge harmful actions as worse > or less moral
- the false information still influences your beliefs.","1. When a correction is issuedToo Much Information,We are drawn to details that confirm our own existing beliefs,Continued influence effect,https://en.wikipedia.org/wiki/Confirmation_bias#continued_influence_effect,The tendency for misinformation to continue to influence memory and reasoning even after it has been corrected.,"Despite a public retraction of a false rumor about a company's financial instability > some investors and customers may continue to be wary due to the initial misinformation.","Even after hearing a news article was corrected
- then following up with your actual2. Persuasion: Making a large > absurd request first (that you know will be rejected)
- there is a tendency to notice it more oftenToo Much Information,We notice things already primed in memory or repeated often,Frequency illusion,https://en.wikipedia.org/wiki/Frequency_illusion,"A cognitive bias in which > after noticing something for the first time
- there is a tendency to notice it more often.","A CEO learns about a new management technique and suddenly sees it being mentioned in multiple business journals and conferencesToo Much Information,We notice things already primed in memory or repeated often,Baader–Meinhof Phenomenon,https://en.wikipedia.org/wiki/Frequency_illusion,"(Another name for Frequency Illusion) A cognitive bias in which > after noticing something for the first time
- they might blame traffic (external)Need To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Actor–observer bias,https://en.wikipedia.org/wiki/Actor–observer_asymmetry#bias,A tendency to attribute one's own actions to external causes while attributing other people's behaviors to internal causes.,"If an employee is late
- they won because they got lucky (external)."" This boosts group morale and self-esteem.","1. Prejudice & Discrimination: ""When we succeed2. Judge actions and outcomes objectively > regardless of who performed them.","1. In-Group Cohesion: This bias builds team spirit. ""We won because we're awesome (internal)
- thinking the past was better even though you ignored its problems.","1. Look at objectiveNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Declinism,https://en.wikipedia.org/wiki/Declinism,The predisposition to view the past more favorably and the future more negatively.,"Senior employees might believe the company's ""golden age"" has passed and that current standards or employee dedication are lower > regardless of objective performance metrics.","You believe society is declining
- this ""fallacy"" can be a useful heuristic. (e.g.2. Trust the math and statistics > not your ""gut"" feeling about what is ""due.""","1. Risk Management (Inverse): In non-independent systems
- to form a better ""story"" (e.g.2. Memory Coherence: Helps us link related events in memory > even if they were far apart
- to see the event as having been predictableNot Enough Meaning,We project our current mindset and assumptions onto the past and future,Hindsight bias,https://en.wikipedia.org/wiki/Hindsight_bias,"The tendency > after an event has occurred
- too?""","1. Personal Happiness: Allows us to remember our lives (e.g.2. When reminiscing > consciously ask: ""What were the bad parts
- uncertain project into smaller ""phases""3. Ask: ""What is the overall probability of success > from start to finish?""","1. Motivation & Project Management: Breaking a huge
- unfamiliar project taskNeed To Act Fast,"To act > we must be confident we can make an impact and feel what we do is important",Hard–easy effect,https://en.wikipedia.org/wiki/Hard–easy_effect,A cognitive bias that manifests as overconfidence on hard tasks and underconfidence on easy tasks.,"An employee might be overly confident in their ability to complete a complex
- validating statements (""It seems like you're a very loyal person3. Ask: ""Could this also apply to my neighbor?""","1. Rapport & Validation (Therapy > Coaching): A skilled coach or therapist can use reflective
- visually strikingToo Much Information,"Bizarre > funny
- vivid details (the ""conjunction"") makes a story more plausible2. Ask: ""Is it more likely that this one thing is true > or that this one thing AND a second thing are both true?""","1. Storytelling & Persuasion: Adding specific
- we feel we have learned something and can predict it next time2. When evaluating a bad outcome > ask: ""What did we know at the time?"" not ""What do we know now?""","1. Learning & Sense-Making: Helps us ""make sense"" of a chaotic world. By believing an outcome was predictable
- we get to believe ""That won't happen to me3. Look for the situational or systemic causes of an accident > not just the personal ""blame.""","1. Sense of Safety / Reduced Anxiety: This bias protects us from anxiety. By blaming a victim (""They weren't paying attention"")
- well-dressed2. Leadership: A leader who is charismatic and a great public speaker (one trait) is often perceived as being smart and trustworthy (other traits) > which helps them inspire a following.","1. Hiring: An interviewer sees a candidate is attractive
- where older individuals mistakenly believe a word2. Acknowledge that your own awareness is not the same as an event's origin.","1. Personal Engagement: Makes the world feel fresh and new. Learning a new word and ""seeing it everywhere"" can be a fun > engaging experience that reinforces learning.","1. Generational Conflict: Can lead to a ""kids these days"" mentality
- whereas if evaluated independentlyToo Much Information,We notice when something has changed,Distinction bias,https://en.wikipedia.org/wiki/Distinction_bias,The tendency to view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately.,"When comparing two software packages side-by-side > a manager might overemphasize minor differences in features
- while disregarding reports suggesting potential risks or downturns.","When you're trying to dietToo Much Information,We notice things already primed in memory or repeated often,Attentional bias,https://en.wikipedia.org/wiki/Attentional_bias,"The tendency for perception to be affected by recurring thoughts > or to pay more attention to certain types of information while ignoring others.","An investor primarily focuses on news articles confirming their belief that a particular stock will rise
- while ignoring the high base rate of startup failures.","You believe a rare genetic disease is common because you've heard about a few casesToo Much Information,We notice things already primed in memory or repeated often,Base rate fallacy,https://en.wikipedia.org/wiki/Base_rate_fallacy,"The tendency to ignore base rate information (generic > statistical information) and focus on specific information (information only pertaining to a certain case).","A startup founder overestimates their chance of success by focusing on anecdotal stories of successful entrepreneurs
- while keeping assets that have dropped in value.","An investor sells winning stocks too early to lock in small gains but holds onto losing stocks hoping they'll reboundNeed To Act Fast,"To get things done > we tend to complete things we've invested time and energy in",Disposition effect,https://en.wikipedia.org/wiki/Disposition_effect,"The tendency of investors to sell assets that have increased in value
- your effort2. Focus 100% of your effort on what you can control (e.g. > your response
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2. Create a rational budget based on goals
not on the source of the money (e.g.
""A 'bonus' is just 'income' and should go toward my 'savings' goal"").","1. Budgeting & Saving: This can be harnessed for good. You intentionally create a mental ""account"" (e.g.
Description
"" which makes you less willing to ""steal"" from it for everyday spending.