12/27/2023 0 Comments Perception biasIn management, the opposite of this is called group-think and companies try to fight against it. If everyone agrees with something, then you are more likely to agree with that position than oppose it. It happens a lot in the stock market too, because if a person starts buying a given stock because they think it is going to rise, then a lot of other people will also start buying it. For instance a lot of people vote for a certain candidate because he is the most popular, or because they want to be part of the majority. If you’ve ever heard someone saying if your friend jumped off a bridge, would you? That person is accusing you of the bandwagon effect. In other words, they follow the rest without even thinking. People do or believe in something not because they actually believe in it, but just because the rest of the world believes in it. Terrorists are given a lot of prominence because it is way scarier to die from a terror attack, so people talk a lot about this and the media is full of those stories. Estimates also indicate that you are 130 times more likely to be killed by the police than you are likely to be killed by a terrorist. Similarly, you are more likely to be killed by a cow or a falling coconut than you are of being killed by a terrorist. Yes, TVs literally fall on people and kill them 55 more times than terrorism kills people in the U.S. To put this into perspective, televisions cause 55 times more deaths than terrorism. The news always talks about that, and because of that, it inflates the danger posed by terrorism. For example, some people think that terrorism is the biggest threat to the U.S. People overestimate the value of the information that they have. This is just one generic example of the anchoring bias at play. You feel like you are getting a great deal, but if I had initially told you the car costs $10,000 and you return and I say it now costs $20,000, this no longer sounds like such a good deal because of the anchoring bias. If you ask for its price and I tell you $30,000, when you come back a week later and I tell you that the price is $20,000, the car will suddenly look very affordable because your judgment is influenced by the initial price of $30,000 which you were told a week earlier. The very first information has tremendous influence on our brain.įor example, I want to sell you a car, and you are interested in buying. Anchoring BiasĪs humans, we normally completely rely on the first impression that we get of something no matter how reliable that piece of information is as we make decisions. Watch this insightful video on the 12 of those most common biases.Ĭan’t Watch? Check Out This Summary Below. This includes becoming aware of our biases and how they affect our thinking and decision making. Especially in these times with so much access to conflicting information, it is important that we sharpen our logical thinking. We, humans, are susceptible to a variety of cognitive biases and they affect how we look at the world around us.
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