Natural Rationality | decision-making in the economy of nature


Natural Irrationality. How judgement and decision-making can go wrong

Lifehack has an interesting post about "7 Stupid Thinking Errors You Probably Make". Readers of this blog might be already familiar with these (confirmation bias, recency effects, etc.), so here a the full list from Wikipedia:

  • Bandwagon effect — the tendency to do (or believe) things because many other people do (or believe) the same. Related to groupthink, herd behaviour, and manias.
  • Base rate fallacy
  • Bias blind spot — the tendency not to compensate for one's own cognitive biases.
  • Choice-supportive bias — the tendency to remember one's choices as better than they actually were.
  • Confirmation bias — the tendency to search for or interpret information in a way that confirms one's preconceptions.
  • Congruence bias — the tendency to test hypotheses exclusively through direct testing, in contrast to tests of possible alternative hypotheses.
  • Contrast effect — the enhancement or diminishment of a weight or other measurement when compared with recently observed contrasting object.
  • Déformation professionnelle — the tendency to look at things according to the conventions of one's own profession, forgetting any broader point of view.
  • Endowment effect — "the fact that people often demand much more to give up an object than they would be willing to pay to acquire it".
  • Extreme aversion — the tendency to avoid extremes, being more likely to choose an option if it is the intermediate choice.
  • Focusing effect — prediction bias occurring when people place too much importance on one aspect of an event; causes error in accurately predicting the utility of a future outcome.
  • Framing — by using a too narrow approach or description of the situation or issue.
  • Hyperbolic discounting — the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs, the closer to the present both payoffs are.
  • Illusion of control — the tendency for human beings to believe they can control or at least influence outcomes that they clearly cannot.
  • Impact bias — the tendency for people to overestimate the length or the intensity of the impact of future feeling states.
  • Information bias — the tendency to seek information even when it cannot affect action.
  • Irrational escalation — the tendency to make irrational decisions based upon rational decisions in the past or to justify actions already taken.
  • Loss aversion — "the disutility of giving up an object is greater than the utility associated with acquiring it".(see also sunk cost effects and Endowment effect).
  • Mere exposure effect — the tendency for people to express undue liking for things merely because they are familiar with them.
  • Need for closure — the need to reach a veredict in important matters; to have an answer and to escape the feeling of doubt and uncertainty. The personal context (time or social pressure) might increase this bias.
  • Neglect of probability — the tendency to completely disregard probability when making a decision under uncertainty.
  • Omission bias — The tendency to judge harmful actions as worse, or less moral, than equally harmful omissions (inactions).
  • 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.
  • Planning fallacy — the tendency to underestimate task-completion times.
  • Post-purchase rationalization — the tendency to persuade oneself through rational argument that a purchase was a good value.
  • Pseudocertainty effect — the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes.
  • Reactance - the urge to do the opposite of what someone wants you to do out of a need to resist a perceived attempt to constrain your freedom of choice.
  • Selective perception — the tendency for expectations to affect perception.
  • Status quo bias — the tendency for people to like things to stay relatively the same (see also Loss aversion and Endowment effect).
  • Unit bias — the tendency to want to finish a given unit of a task or an item with strong effects on the consumption of food in particular
  • Von Restorff effect — the tendency for an item that "stands out like a sore thumb" to be more likely to be remembered than other items.
  • Zero-risk bias — preference for reducing a small risk to zero over a greater reduction in a larger risk.