Thinking errors and cognitive biases that can lead to poor decision making

As proponents of a rational decision making process, we continuously must contend with the question, "If we are (or desire to be) rational beings, why do we so often make irrational choices?" Recognize that an irrational choice is one that does not seek to provide the best possible outcome.

This question leads us into the realm of cognitive psychology where significant study has revealed numerous ways in which we tend to not be rational. In Dan Ariely's book, Predictably Irrational, numerous cases are explored where we are not only irrational, but we are predictably (based on statistics) irrational. Dan cleverly exposes some of the many cognitive biases and thinking errors that lead to choices that violate the rational thought pattern.

Errors related to thinking too positive

We are often encouraged to remain positive when dealing with tough problems or decisions. While this may be good general advice, there are some cognitive errors and biases associated with thinking too positive:

• Minimizing negatives - the inclination to reduce or neglect the negatives in a decision problem
• Confirmation bias - people tend to search for evidence that supports a specific conclusion or decision outcome while ignoring disconfirming facts
• Wishful thinking, optimism bias - we lean toward seeing things in a positive light which can distort our thinking when evaluating outcomes
• Error in attribution - we like to credit success to our talents and capabilities yet we attribute failures to external causes or luck. This is reversed for the success of others.

Errors related to thinking too negative

It is easy to get focused on the negatives in a situation, especially when things aren't going well. Here are some of the thinking errors that occur when we move too far to the negative:

• Minimizing positives, magnification of negatives, filtering - positives are diminished, filtered or ignored while negatives are given emphasis out of proportion to their actual impact
• Personalization - we can start to see ourselves as the cause of some negative event or outcomes for which we were not really responsible
• Should thinking - similar to wishful thinking, should statements can reflect standards for behavior or expectations about how the world should work that are not evidenced in reality. Missed "should" expectations can lead to additional thinking errors.
• Control Fallacies, illusion of control, underestimating uncertainty - negative thinking can lead to a view of having no control. Alternatively, we can conclude that we have more control than we actually have, particularly when we underestimate the uncertainty associated with predicting consequences when making a decision.

Errors related to thinking too little, or not at all

In an era of instant gratification, cognitive errors that come from thinking too little may be a source of many of today's problems. Here are some of the errors that characterize too little thought:

• Jumping to conclusions, arbitrary inference - this cognitive bias leads a person to quickly draw a conclusion without the necessary evidence
• Selective abstraction, overgeneralization, labeling, mislabeling - in this cognitive bias belief is formed around a detail that is taken out of context while everything else in the context is ignored
• All or nothing, false dilemma, false dichotomy - this thinking error reduces a decision to two options when those are not necessarily the only choices available. Often, the two alternatives are at the extreme ends of a spectrum of possibilities and all intermediate options are absent.
• Composition fallacy - error where a part of something is thought to be indicative of the whole
• Fallacy of misleading vividness - cognitive error where one becomes convinced of a broad problem when a single detail or event is described in vivid terms, even if it is an rare event
• Inertia, complacency - unwillingness to change thought patterns that have been used in the past when confronted with new circumstances
• Incremental decision making, escalation of commitment - a decision is seen as a small step in a process that tends to perpetuate a series of similar decisions that could lead to a growing sense of undeserved commitment
• Group think - cognitive bias to conform to the opinions held by the group due to peer pressure

Relying too heavily on emotions

The Interdependence of emotional and rational thinking is powerfully presented in recent neurobiological studies that establish that emotion is essential in rational decision making. However, it is important to recognize that thinking errors abound when we appeal to emotion or start to reason emotionally.

Feelings are valid, and can convey important information about ourselves. They can be positive, negative or ambivalent, but they reflect our lens into the world that may have little to do with what is actually out there. Avoiding emotional decision traps requires close scrutiny of feelings experienced during the decision making process.

Some techniques to deal with thinking errors when making decisions

With all the potential decision traps given above, it might cause one to wonder how anyone can ever make an effective decision. Here are some simple techniques that can go a long way in overcoming these thinking errors:

1. Sleep on it or add a little decision delay. Time tends to reduce emotions that can be driving the errors that lead to poor decisions.
2. Separate fact from interpretation. Much of the data and information we encounter is loaded with interpretation, eliciting emotions that are not helpful in choosing (e.g. misleading vividness). Separating fact from interpretation allows each to be considered appropriately. (You will be shocked when you try this and see how many of our everyday statements are loaded with interpretation.)
3. Solicit an outside opinion. A different point of view can reveal many of the cognitive biases that might be in play.
4. Have a decision making process. A well constructed process will help minimize and squeeze out many of the thinking errors identified above.

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