5 Mental Mistakes That Keep You From Making Good Decisions
I’d like to believe I’m a rational person, but I’m not. The good news is that it isn’t just me or you who are affected. We are all illogical and make mistakes in our thinking.
For a long time, scientists and economists assumed that humans made rational, well-thought-out decisions. Researchers have discovered a wide spectrum of mental mistakes that impair human reasoning in recent decades. We sometimes make logical decisions, but most of the time we make emotional, irrational, and confusing ones.
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Psychologists and behavioral researchers are fascinated by these various mental errors. There are dozens of them, each with a fancy name like “simple exposure effect” or “narrative fallacy” attached to it. But I’m not interested in getting mired down in scientific jargon today. Instead, let’s talk about the most common mental errors we encounter in our daily lives and break them down into simple terms.
Here are five frequent mental errors that might lead to poor decisions.
Survivorship bias
Survivorship bias can be found on almost every popular internet media site these days. Survivorship bias can be shown in stories with headlines like “8 Things Successful People Do Everyday,” “The Best Advice Richard Branson Ever Received,” and “How LeBron James Trains in the Off-Season.”
The term “survival bias” refers to our inclination to focus on the winners in a given field and try to learn from them while entirely overlooking the losers who are using the same method.
Thousands of sportsmen may have trained in a similar manner to LeBron James but never made it to the NBA. The problem is that thousands of athletes who never made it to the top go unnoticed. We only hear from those who make it out alive. We put too much weight on one survivor’s ideas, strategies, and advice, while ignoring the fact that the same ideas, strategies, and advice didn’t work for most victims.
Another example is “Richard Branson, Bill Gates, and Mark Zuckerberg all dropped out of school and became billionaires!” You don’t need to go to school to be successful. “All entrepreneurs need to do now is stop wasting time in class and get going.”
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It’s certainly likely that Richard Branson was successful despite rather than because of his path. Thousands of other entrepreneurs with failed ideas, debt-laden bank accounts, and half-completed degrees exist for every Branson, Gates, and Zuckerberg. Survivorship bias implies not only that a technique may not work well for you, but also that we have no way of knowing if the strategy works at all.
When only the winners are remembered and the losers are forgotten, it is very hard to tell if a plan worked or not.
Loss aversion
Loss aversion describes our high preference for avoiding losses over gaining advantages. According to research, if someone offers you $10, you will feel slightly more satisfied. However, if you lose $10, you will feel significantly less satisfied. Yes, the answers are diametrically opposed, but their magnitudes are not equal.
Our natural need to avoid loss leads us to make rash judgments and alter our behavior in order to maintain what we already have. We are hard-wired to take care of the things we own, which could make us overvalue them compared to other options.
Purchasing a new pair of shoes, for example, may bring a minor bump in enjoyment. Even if you never use the shoes, giving them away after a few months could be excruciatingly painful. You never use them, yet you can’t bear parting with them for some reason. Aversion to loss.
Similarly, you may feel a tinge of pleasure as you breeze through green lights on your way to work, but you will become enraged when the driver in front of you sits at a green light, denying you the opportunity to pass through the junction. It’s significantly more agonizing to miss out on the chance to make the light than it is to hit the green light right away.
The availability heuristic.
The Availability Heuristic is the mistake that our brains often make when they think that the first things that come to mind are also the most important or noticeable.
According to Harvard University’s Steven Pinker’s research, we are now living in the least violent period in history. Right now, there are more people living in peace than ever before. Homicide, rape, sexual assault, and child abuse are all on the decline.
When most individuals hear these figures, they are taken aback. Some people still don’t trust them. Why are there so many wars occurring today, if this is the most peaceful time in history? Why do I hear of rapes, murders, and other crimes on a daily basis? Why are so many acts of terrorism and devastation being discussed?
The truth is that we are not only living in the most tranquil period in history but also in the most well-reported period. Any natural disaster or criminal information is now more widely available than it has ever been. With just one search on the Internet, you can find out more about the most recent terrorist attack than any newspaper could have in the past 100 years.
Although the overall number of harmful occurrences is falling, the likelihood of hearing about one (or several) is growing. Because we can remember these things so easily, our brains assume that they happen more often than they actually do.
We overvalue and overestimate how important things are that we remember, but we undervalue and underestimate how important things are that we don’t remember.
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4. Stabilization
Near my hometown, there is a burger joint famed for its gourmet burgers and cheese. “LIMIT 6 TYPES OF CHEESE PER BURGER,” they plainly say on the menu.
My initial reaction was, “This is absurd.” On a burger, who gets six types of cheese?
My second thought was, “Which six will I get?”
Until I heard about anchoring, I had no idea how intelligent the restaurant owners were. Normally, I would just choose one type of cheese for my burger, but when I saw “LIMIT 6 TYPES OF CHEESE” on the menu, my imagination went to a far higher number.
Most consumers aren’t going to order six types of cheese, but it’s enough to raise the average from one slice to two or three pieces of cheese and add a few dollars to each burger. You enter with the intention of ordering a standard dinner. You leave wondering how you managed to pay $14 for a burger and if your date will allow you to roll down the windows on the way home.
This effect has been confirmed in numerous research investigations and business settings. Business owners have discovered that if you state “Limit 12 per client,” people will buy twice as much merchandise as if you say “No limit.”
In one study, volunteers were asked to estimate the percentage of African countries in the United Nations. They had to spin a wheel that would land on either the number 10 or the number 65 before they could estimate. When participants arrived at 65, the average prediction was about 45 percent.The average estimate was roughly 25% when volunteers arrived on average. This 20-digit change was caused by quickly anchoring the guess with a number that was either higher or lower.
The most common place you’ll hear about anchoring is in the context of pricing. You might consider a new watch to be too expensive for your budget if it costs $500. When you come into a store and see a $5,000 watch in the front of the display, the $500 watch around the corner suddenly seems very fair. Many of the premium products that firms sell are unlikely to sell many units on their own, but they play a key role in anchoring your thinking and making mid-range products appear far less expensive than they would be on their own.
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Confirmation bias.
The Granddaddy of Them All, if you will. Confirmation bias describes our tendency to seek out and select information that supports our opinions while disregarding or dismissing information that contradicts them.
Person A, for example, considers climate change to be a serious problem and only seeks out and reads material about environmental conservation, climate change, and renewable energy. As a result, Person A’s current ideas continue to be confirmed and supported.
Person B, on the other hand, does not believe climate change is a significant issue and solely seeks out and reads stories about how climate change is a myth, why scientists are wrong, and how we are all being duped. As a result, Person B’s current ideas continue to be confirmed and supported.
Changing your thinking is more difficult than it appears. The more you believe you know something, the more you filter out and dismiss all contradictory evidence.
This cognitive pattern can be applied to almost any subject. If you recently purchased a Honda Accord and think it to be the best car on the market, you will naturally read any article that praises the vehicle. Meanwhile, if another publication names a different car as its top pick of the year, you simply disregard it, assuming that the editors of that magazine made a mistake or were looking for something different in a car than you were.
It is not natural for humans to make a theory and then test it in many ways in order to disprove it. Instead, we’re more inclined to construct a single hypothesis, assume it’s correct, and only seek out and believe evidence that supports it. The majority of individuals desire knowledge that confirms what they already know.
Where Should We Go From Here?
When you’ve learned about some of the most prevalent mental blunders, your first reaction can be something like, “I don’t want this to happen!” How do I stop my mind from acting in this way? “
It’s a good question, but the answer isn’t so straightforward. Rather than viewing these errors as evidence of a malfunctioning brain, think of them as proof that the shortcuts your brain employs aren’t always effective. The brain processes discussed above are quite important in many aspects of daily life. You don’t want to get rid of these mental processes.
Our brains are so good at completing these activities—they fall into these patterns so fast and easily—that we wind up employing them in situations where they aren’t useful.
Self-awareness is frequently one of our best options in situations like this. Hopefully, this essay will make it easier for you to detect these mistakes the next time you make them.
FOOTNOTES