Apr 26, 2019
This is the start of a new
series on cognitive biases. To present the series in an organized
fashion I found around 200 biases and then categorized them in a
way that would be relevant to what we do here on The Brainy
Business. I came up with eight categories, and I will go over each
bias in the category in a pretty quick succession.
A cognitive bias is an error in
the way humans think. It's a way that is often not in our best
interest. These biases aren't random. They are predictable and that
is the basis for behavioral economics. This week we are talking
about those personal biases that lead us all to believe we are
uniquely talented and awesome…and generally better than everyone
As you listen to the list, think
about yourself – how have you experienced this in your own life?
And also think about other people – have you seen this in others?
How could you use that bias in the way you message to customers or
attract people to your business?
- [10:48] EVERYONE IS UNIQUELY
- Optimism bias: Humans assume
they are more likely to have a positive outcome in life compared to
- [11:28] You want to look at
ways you can use optimism bias to your advantage when setting big goals, but
your day to day tasks should be more realistic and less than you
think you can accomplish.
- [11:32] Planning
fallacy is the tendency to
underestimate how long it will take us to complete a
- [12:30] Do you ever find
yourself with a list of 10 things you “need to do” today and you
only end up getting through two? Understanding planning fallacy can
help you do better in setting more realistic tasks (and therefore
being happier - and more productive).
- [12:48] Naive
realism is the belief that
unlike other people, we see reality exactly as it is.
- [14:21] Try to be open to the
perspectives of others. Your curse of
knowledge will make this
hard because you know a lot about your area of
- [15:01] In order to be
successful in life and business, you need to be able to understand
the perspectives of other people and how they differ from
- [16:09] The
false consensus effect is our tendency to overestimate how much other
people agree with us.
- [17:41] Illusion
of asymmetric insight this
is when people think they understand their peers better than those
same people understand them.
- [18:15] If you assume that
everyone thinks you don’t understand them as well as they
understand you, it could be beneficial to ask them questions that
help them explain more about themselves to you.
- [18:49] Illusion
of transparency: people
also overestimate their ability to know others, and the ability for
others to know them.
- [19:56] False
uniqueness bias is when
everybody thinks of themselves and their business as a special
snowflake with unique problems unlike anyone else's.
- [21:17] When you are
communicating what you offer, use the Forer effect
(also known as the Barnum effect) to your advantage. This could also be seen as
the astrology effect or the fortune telling phenomenon: people tend
to think statements that are vague and general enough to relate to
a large group of people are highly accurate and “exactly
- [22:42] Generalities can
inspire people to take action, so keep that in mind when creating
- [22:57] Illusion
of control, which is your
tendency to overestimate the influence you have over external
Egocentric bias is
when you feel like you do more than the other person and because of
our naive cynicism, we also expect other people to have this bias
more than ourselves.
- [26:47] It's important to
praise others for their contributions without diminishing your own
- [27:28] Social
comparison bias: Because
of self-preservation and wanting to stand out and be the best, we
tend to favor potential candidates whose strengths are not in
direct competition with our own.
- [27:50] Self
serving bias, where we
want to claim more responsibility for successes than the things we
might have failed on. We want all the glory and none of the
- [28:23] The
spotlight effect is the tendency to overestimate the amount that
others are focused on our appearance or the things we say or
- [28:53] Because everyone else
is the center of their own universe as well, you can relax a
- [30:07] Because of the
3rd person effect everyone believes they're less likely to be
influenced by mass marketing than other people.
- [30:40] A bias
blind spot is where we see
ourselves as less biased than others and tend to be better at
spotting these cognitive biases in others than in
- [31:23] Illusory
superiority is where we
overestimate our own desirable qualities and underestimate our
Restraint bias: We
all think we have more restraint than others and generally
overestimating our ability to resist temptations.
- [32:53] Trait
ascription bias: We think
others have very predictable personalities, moods and behaviors
(that they are more one dimensional) and that we personally are
much more dynamic.
- [35:14] The
overconfidence effect: for certain types of questions, people will
say they are 99% certain in their answers…but they are actually
wrong 40% of the time.
- [36:24] Pro
innovation bias, which is
essentially having massive optimism about an invention or
- [37:48] REVISING IN
- [38:06] Post
purchase rationalization is when people buy on emotion and then persuade
themselves it was the right decision.
- [38:55] Choice
supportive bias is where
we say retroactively are choices were more informed than they
- [39:22] Illusion
of external agency, which
means we think our personal preferences are based on insightful
influences and benevolence.
- [40:21] Illusion
of validity, where we
believe our judgments and choices were accurate.
Conservatism belief revision you would not sufficiently revise your
Continued influence effect, where you continue to believe misinformation
even after it has been corrected.
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