How Biased Are Your Decisions?

In his highly-acclaimed book Seeking Wisdom: From Darwin to Munger, author Peter Bevelin provides a ground-breaking analysis of why we, at times, make poor decisions.

Bevelin focuses deeply on bias — how our internal prejudices factor into our decision making. He breaks down bias into 28 distinct types, some extremely common, some not as much. Yet, each impacts our ability to make rational judgments. Here are the top 5 biases Bevelin describes:

1. Mere-Association Bias: This occurs when we see situations as identical because they appear similar to something we’ve experienced. We often try to compare situations to help us streamline our decisions; yet, we frequently end up comparing an apple to an orange, which then results in a poor choice.

2. Confirmation Bias: We’re more familiar with this one. We begin with the end in mind, believing that we must be right and collect only the data that supports our initial hypothesis.

3. Bias from Over-Influence: We like the person giving us the information, therefore we don’t question the information. We simply trust the person who provided it and do not take the time to gather the facts on our own.

4. Bias from Anchoring: This occurs when we cling to one or two items that anchor our thoughts and beliefs, even if those two points might not be totally relevant to the bigger picture.

5. Bias from Social Proof: This occurs when we just go with popular opinion to be liked and accepted by the masses. We become influenced by what everyone else says and we don’t take time to think independently.

Next time we’re forced to make a tough decision, let’s commit to making sure we’re not committing any of these inherent biases. Let’s commit to drawing our own independent conclusions, regardless of how many people may say otherwise.

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