My Five Favorite Cognitive Biases and How to Make Them Work for You!
Things They Forgot to Tell Me in Business School

Strong problem-solving and effective decision-making skills are consistently ranked as two of the most critical marketplace skills for professionals today. And, if we hope to maximize our accuracy and effectiveness in these areas, we must be vigilant against falling prey to one or more cognitive biases. A cognitive bias is a systematic error in thinking that shorts-circuits the analytical process and negatively impacts the quality of our responses and judgments. Bias often comes as some form of “jumping to conclusions” or “…just because”.

And, if we hope to maximize the accuracy and effectiveness of our actions, we must try to avoid these mental traps…except, of course, when we shouldn’t try.

Because the flip side of a cognitive bias is a heuristic. Closely related but not nearly as popular as bias (or even close cousin fallacy), a heuristic is a helpful thing, a practical analytical process that short-cuts the decision-making and problem-solving process and allows us to greatly increase our speed of response. They are used extensively by people, animals, and smarter variants of machines. Even for someone intensely dedicated to the power of half-knowing, the world is just too busy to understand the context and details of everything put in front of us. And, if we do not develop short-hand mechanisms for working our way through these situations with alacrity we would be paralyzed with indecision at the start of every day. Think of it as the value of “…having seen this a hundred times before”. Heuristics come as some form of “satisficing”, never being the optimal decision-making method, but fast and fit (enough) for purpose.  

So, when faced with two short-cuts, one that hurts decision-making and problem-solving and the other that helps them, how do we tell the difference between a helpful heuristic and a hurtful bias?

No idea. Honestly, not a clue. The simple and obvious answers that “one works while the other doesn’t”, and “you’ll know it when you see it” somehow aren’t providing their usual comfort. But, as a practical, progressive person I do not let a little confusion get in the way. Quite the contrary, I have instead assembled this collection of my favorite and most useful mental short-cuts, however so-called:

1.  Confirmation Bias – See This, I Knew It All Along!
The old standby. If ever we find ourselves in a bind, undecided as to what spin to give a new piece of knowledge, we can always rely on the confirmation bias. Confirmation bias is where a person seeks out and interprets information that backs up a thought or theory they already have. When matched with an unwillingness to accept the validity of new evidence defying previously held beliefs, they become an unbeatable combo, standing on the shoulders of things we already hold dear. 

Should we so choose to upgrade the branding, we can refer to this as an availability heuristic, relying on available knowledge of similar circumstances to arrive at a quick decision regarding new information.

2.  Bandwagon Effect – Because Everyone Else Is Doing It!
All hail the people pleasers. Sometimes we lack the energy or will to resist and just need to go with the flow, and for occasions like this, there is the bandwagon effect. The bandwagon effect is a bias where one places much greater value on decisions conforming to dominant beliefs or to please specific audiences. Bandwagon is a member of the Group Think family of cognition and proves exceptionally popular in politics and consumerism.

Should we choose, we can squeeze this in as a representativeness heuristic, where one uses a representative prototype, in this case, what everyone else is doing, to guide a quick decision.

3.  Anchoring Bias – Grab That First Thought and Stick With It!
If going with our first answer works for multiple-choice tests, why won’t it work for other aspects of life? The anchoring bias is when one depends heavily on a single piece of information, judging all other information relative to this first piece, thus “anchoring” thought and discussion in place. I tend to use this bias sparingly due to its close relationship with anecdotalism. Anecdotalism, traditionally, was a state where one’s world view on any issue was formed around what they heard happened to the wife of the brother of their friend’s uncle’s dentist. In recent times, the anecdotalist has seamlessly transferred into believing that post that their friend, who would never lie, shared on social media - thus losing even the most tenuous connection back to the original dentist, never mind the wife of the brother.

On the off-chance that anchoring does work, and we want to give it a little polish, we can simply flip the table and refer to it as an anchoring heuristic - using initial inputs as a basis for assessment of subsequent information in an uncertain context. A favorite of all upbeat conspiracy theorists.

4.  Ambiguity Bias – A Bird (Almost) in the Hand…!
Decision-making is often affected by incomplete information, or "ambiguity". The ambiguity bias compensates for this lack of information by simply selecting options for which the probability of a favorable outcome is known, over options for which the probability of a favorable outcome is unknown. In other words, better a known unknown than an unknown unknown.

And, if we so choose, we can simply refer to it as a type of simplification heuristic, a process wherein we eliminate extraneous information to simplify and speed up our decision-making and problem-solving. After all, what could be more extraneous to practical decision-making than jumping at unknown shadows?

5.  Framing Effect – But the Story Was So Good When They Told It!
And finally, often we just do not have the background or disposition to make a decision and must rely on the presenter of the information to tell us what to do. This is where the framing effect comes in, a bias where people base their decisions about new information on whether the new information is presented in a positive or negative light. After all, we are more likely to like something presented as positive, and dislike something “framed” as negative.

Here we can invoke the similarity heuristic, a process wherein our decision-making is based on the similarity between the current situation and other actual or prototypical situations, which are conveniently presented to us as part of the framing of the new information. The power of the framing effect is demonstrated by its widespread use in advertising, communication, and sales.

Conclusion: Problem-solving and effective decision-making abilities are consistently ranked as two of the most critical marketplace skills for professionals today, and each of these five decision short-cuts can powerfully impact our effectiveness in these areas. Ensuring that this impact is positive is not easy, but don’t worry, you’ll know it when you see it.  
 
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