Decision Making Cognitive Biases In The World of Work
Decision Making Cognitive Biases are persistent, biased patterns of thinking or decision making that lead to “irrational” decisions. Decision biases affect our ability to make rational decisions. These biases can have material impacts on behaviors and decisions in the world of work.
Decision biases are considered to be persistent patterns of irrationality that can materially affect an individual’s decision making process.
They affect a wide range of aspects of life from planning and strategy at work to consumption or social interaction choices in our personal lives. There are many more biases than we cover here, but this is a useful starter.
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We value things we own more than identical objects that we don’t own. For example, we’ll often need to be paid more than something’s replacement cost to part with it. One in the hand is worth more than two in the bush, and all of that.
We reach different decisions based on exactly the same information, when that information is provided in different ways.
We tend to think that the probability of future events are altered by the outcomes of past events.
This is one of those decision making cognitive biases that appears in many areas. For example in sports people think that players can get a “hot hand”, though statistically they don’t really do so.
We weight outcomes in the present much more than outcomes in the future. This is “irrational”, but perhaps quite rational in some other ways.
We consider things that we have created ourselves to be more valuable than things created by others.
Illusory Truth Effect
The illusory truth effect is a decision making cognitive bias that relates to what we believe.
We believe statements that are easier to believe, or that we’ve heard a lot, regardless of whether they are actually true.
We experience more negativity when we lose something that we gain positivity when we obtain the same thing. Losing is more painful than gaining is pleasurable.
Mere Exposure Effect
We unduly like things more, the more we have been exposed to them, regardless of our true engagement and understanding of them.
This is one of the decision making cognitive biases that’s probably had the largest effect on our lives and cities.
Not Invented Here
We avoid or dislike things that have not been created by ourselves or our teams.
We judge the quality of decisions based on ultimate outcomes, not on the objective quality of the decision at the point in time it was made.
We tend to consistently underestimate how long it will take to complete tasks.
We are excessively optimistic towards novelty and innovation, underestimating limitations and weaknesses. Sometimes old things, process and ways of doing things are pretty good.
Rhyme or reason is another decision making cognitive bias that relates to what we believe.
We believe statements that rhyme more than statements of the same content which do not rhyme.
Our expectations about a situation or event affect our perception of a situation or event.
Social Comparison Bias
We generally favor candidates who do not compete with our own skill sets when we recruit.
We generally prefer things to stay the same as opposed to change.
We expect an individual to fit within our interpretation of a group, without any information about the specific individual.
We place more weight and significance on individuals, objects or organizations that survive a process, situation or event than those who do not. For example, because we’re surrounded by successful businesses, we think that most businesses are successful, failing to consider all of those that have not survived.
We are more likely to believe a specific event to be true if the event fits with our overarching beliefs than if it doesn’t. Similarly, we will find correlations that support our beliefs more often than we find correlations that do not.
You can listen to our podcast, below, on nudging to learn more about how our behaviors can be influenced:
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We think that cognitive biases are fascinating and important. Decision biases clearly lead us as individuals and leaders to make irrational decisions, which can lead to negative outcomes for ourselves and those around us.
Learning about our decision biases can help us make better (or at least more rational) decisions. It isn’t easy to think and manage ourselves away from having these biases so, which is why data and data based decisions are so important, particularly for organizations.
Our Podcast is a great way to learn more about hundreds of fascinating topics from around the world of work.
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