Cognitive Biases: The Four Mistakes We Make in Our Thinking
The book groups four common judgment problems: anchoring, confirmation bias, availability, and errors from accepting a quick intuitive answer without checking it. The examples suggest ways to question first impressions and look beyond readily available evidence.
THE IDEA
The Four Mistakes We Make in Our Thinking
| THE ANCHOR EFFECT | THE CONFIRMATION ERROR | |
|---|---|---|
| ASSUMPTION | We considered all factors before making a decision. | We objectively assessed the situation before making a decision. |
| REALITY | We most strongly trust the very first information we are given: the first thing we hear about someone influences our judgment of the person; the first price we are quoted forms the basis for the negotiation. Thus the expression: “You only get one chance for a first impression.” It takes a huge amount of persuasive power to hoist the anchor once it has been lowered. | We interpret information in such a way that it affirms our existing assumption or conviction. Or vice versa: we block out information that contradicts our opinions. Nobody googles counterarguments. |
| SOLUTION | Don’t trust your first impressions. | Assume that you are wrong. |
| THE AVAILABILITY ERROR | THE FAST/SLOW ERROR | |
|---|---|---|
| ASSUMPTION | We have good arguments for making a particular decision. | We believe we have intuitively made the right decision. |
| REALITY | We base our arguments on simple, available and above all autobiographical information. You had a car accident with a Golf? VW makes awful cars! You once had a pretty girlfriend from Poland? All Polish people are good-looking! | Although impulsive decisions can be good (see the book’s discussion of unconscious thinking, p. 44), they aren’t always. Daniel Kahneman identified two styles of thinking: System 1 (quick and intuitive) and System 2 (slow and careful). An example: a coffee and a cookie together cost $1.10. The coffee costs $1 more than the cookie. How much does the cookie cost? Most people would immediately say 10 cents. This is the System 1 way of thinking. But if you think through the problem more carefully, i.e., with System 2, you will come to the right answer: the cookie costs 5 cents. |
| SOLUTION | Don’t trust anecdotal evidence. | Read emails through again before sending them. |
Cognitive biases are those systematic errors of judgment that we all make unconsciously and that influence our decisions. You can’t eliminate these biases, but you can sharpen your thinking.
When to use it
Negotiations: Be aware of anchors when setting or receiving initial offers to avoid being swayed by arbitrary starting points.
Decision-making meetings: Encourage team members to present counterarguments to avoid confirmation bias.
Risk assessment: Avoid relying on vivid anecdotes from personal experience; instead seek broad statistical data.
Problem solving: Pause before answering complex questions to engage System 2 thinking and avoid intuitive errors.
FROM THEORY TO EVERYDAY LIFE
In practice
Anchor Effect in Negotiation
The first price quoted in a negotiation strongly influences the final outcome. For example, a car dealer's initial high offer sets an anchor that makes a slightly lower price seem reasonable, even if it is still above market value.
Confirmation Error in Information Search
When someone already believes a certain political view, they tend to seek out news sources that confirm that view and ignore contradictory evidence.
Availability Error from Personal Experience
After experiencing a car accident with a specific model, a person may irrationally conclude that all cars of that brand are unsafe, overemphasizing a single vivid memory.
Fast/Slow Error: The Coffee and Cookie Problem
A coffee and a cookie together cost $1.10. The coffee costs $1 more than the cookie. Most people quickly answer 10 cents (System 1), but the correct answer is 5 cents (System 2).
A MOMENT TO REFLECT
Put it to work.
Think of a recent decision you made. Did the first piece of information you received (an anchor) disproportionately influence your final choice?
When was the last time you actively searched for evidence that contradicted a strongly held belief? How did that feel?
Recall a time you made a snap judgment that turned out to be wrong. Could a more deliberate, System 2 approach have led to a better outcome?
References
- Thinking, Fast and Slow — Daniel Kahneman (2011)
CONTINUE THE CONVERSATION
Source texts
- The Decision Book Fifty Models for Strategic Thinking