Tag: Cognitive bias

  • How hindsight can lead to worse insights (and how to avoid the hindsight bias)

    “Hindsight is 20/20.”

    So the old expression goes. But in reality hindsight is deceptive. Without the right protection in place, hindsight can lead to us making worse decisions in the future. 

    Here’s a quick intro to the hindsight bias and how to tackle it. 

    Hindsight bias

    What is hindsight?

    Hindsight is looking back at a situation and only then understanding it. 

    You realised things you dismissed were important, or what you thought was wrong.Like when you rewatch a movie knowing the ending or twist and scenes have a whole new meaning.

    And this is why hindsight can be helpful.

    With the benefit of knowing the end result, we can

    • realise mistakes we made
    • spot missed opportunities
    • and be better prepared for next time

    But hindsight can blind too.

    The dangers of hindsight

    When we look back, we can assume a moment of luck or chance was inevitable.

    Someone who just happens to be in the right place can look like a genius, or we can assume the strategy was correct when really it was just good fortune.

    When that happens, we learn the wrong lessons.

    So how can we combat hindsight bias?

    The best remedy is to consider alternative outcomes and explain why ours was the most likely to occur.

    The danger is that we can be influenced by other biases like the confirmation bias where we will ignore evidence against our beliefs.

    Conclusion 👨‍🏫

    Hindsight can help us learn from the past, but it can make us assume past events were inevitable.

    We should reflect on how different events could have gone and how likely they were.

  • Confirmation bias: One researcher called this the biggest limiter to our knowledge.

    What is the biggest interference on human reasoning?

    According to Psychologist Raymond Nickerson, Confirmation bias is a major contender (Nickerson 1998, 175).

    So what is it, and how can we overcome it?

    What is confirmation bias?

    Imagine you saw two sets of data, one that confirms your beliefs, and one that goes against them.

    Which would you trust?

    Confirmation bias is the fact that we are more likely to trust that which confirms our existing beliefs.

    That causes problems. We ignore data that goes against our beliefs and worse still, it causes us to seek data that confirms our beliefs and not look for that which disagrees with them.

    And marketers use it against you too.

    How marketers use confirmation bias against you

    As Zig Ziglar said

    “People buy on emotion and justify on logic.”

    – Zig Ziglar

    When we come to choose between two options, we are looking for evidence to back up our beliefs and the option we want.

    And confirmation bias means we find it.

    Marketers just need to give us excuse structures we want to buy what we want.

    How can we overcome confirmation bias?

    Badly. That’s the honest answer.

    Confirmation bias affects all of us to some degree, the best we can do is try to fight it by

    • Being okay with being wrong
    • Testing your beliefs
    • Trying to disprove your beliefs

    When it comes to purchases, that means laying out the clear criteria for your purchase as well as red lines.

    • What MUST it have,
    • What would be nice to have
    • What won’t work

    These criteria can help guide our decisions. But confirmation bias will still affect us.

    Conclusion

    Confirmation bias causes us to look for favour evidence we like.

    The best tool against it is to be humble and look for evidence to disprove our beliefs.

  • How marketers use the Anchoring cognitive bias against you, and how to use it in your favour.

    Anchoring is a well-known trick marketers use to convince people to buy. 
    But we can use it on ourselves to make better decisions. Here’s how. 

    What is anchoring?

    Anchoring is a cognitive bias where our perceptions change based on what we see something compared to — the anchor point.

    Marketers often anchor prices e.g.

    • $10 book or $99 course (expensive)
    • $1000 workshop or $99 online course (bargain!)

    So how can we use it?

    Create your own anchors to combat marketers

    Whenever you see an item with an anchor, write down alternative options to create new anchors. Why?

    Writing forces us to slow down and really consider the points. It puts a blocker on those impulsive thoughts and activates our slower thinking systems.

    Plus by adding a new anchor you can pull yourself in another direction.

    So now instead of the limited options the marketers wants to present you with, you have a whole new set.

    Make better decision by anchoring your options.

    So next time you see an offer compared with one other option, stop.

    Write down alternative options at different price points, ease of access, time required, etc. Then consider what you could do with the time, money, or hassle you’d save taking another option.

    Maybe the time that more expensive option would save you is of great benefit for you, but maybe you could use the money you’d say for another purchase that would benefit you even more.