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How your brain can make you make bad decisions

June 5, 2020

The opinions of the employees of s You are personal.


How sWe want to believe that we are perfect beings rationaland that we make our decisions based on our logical and critical thinking. According to Dr. Daniel Kahneman, an economist who won the Nobel Prize cognitive bias Since Amos Tversky has since passed away, we are far further away from making logical decisions than we would like to admit.

How your brain can make you make bad decisionsHow your brain can make you make bad decisions

Cognitive bias is the tendency to act, believe, and process information in a way that promotes our personal interests, trust, or past experience. If we are not aware of this tendency, as we are often not when we are at the crucial point in the decision-making process, we can make decisions and act in ways that do not benefit our personal or business interests.

Cognitive prejudices or prejudices are often unknown and remain hidden, and we are all susceptible to it. How to find out if your prejudices make that difficult Success of your company? This can be achieved with a little self-confidence and some tactical changes so that you can learn to ask different questions to challenge your prejudices and thereby make better decisions.

The ambiguity effect: avoid the unknown

In this case, you prefer options whose known good results are known to you, rather than options where the chances of a good result are unknown.

The problem: You may miss some viable options because the result is less certain.

The ambiguity effect corresponds to the saying “better known than bad to know” and leads you to lean towards options that you do not know and avoid unfamiliar options, although this may have led to things that are more advantageous for you or you . your business.

Carsten Eickhoff examined cognitive prejudices related to crowdsourcing, including the ambiguity effect, and explained that missing information makes decision-making much more complicated and sometimes even impossible, while also influencing some of them. Known options look less interesting. And the result is that you get stuck in limbo and can’t make a decision.

The solution: Use a team decision model to evaluate the information before making important decisions that you need to make for your company. Above all, evaluate the unknown possibilities. What do not you know? What information are you missing?

Brainstorm to collect all the information you can. And if you can’t (let’s say the information belongs to your competition), consider what that information would tell you if you had access to it and see if there are alternative resources. For example, you may not have access to confidential information that comes from your competitor’s customer service surveys. However, you can review independent reviews of the new products.

Anchoring: your favorite references

Anchoring is a distortion that is not related to the ambiguity effect. Instead of analyzing every single scenario that is presented at a certain point in time based on clear factors for your company, you always rely on the same factors that you take into account in every decision. Everything that was important to you when making a decision is the same reference that you use for all decisions.

The problem: One decision is not the same as the other. Good leaders know how to assess what’s important in each situation and make the right decision based on what’s relevant to that specific situation.

Like most people, you probably have some kind of reference that you use to make decisions where you see the important information you lack. And this reference measure has helped you all your life.

The solution: Before you start evaluating an important business decision, take a moment to understand what would be the best possible outcome. What is the best thing you can imagine if your company does something based on your decision? Once you are clear about the optimal result, you have a better idea of ​​the parameters you should use to make your decision.

Confirmation errors

One of the best-known cognitive biases is affirmation, which affects your ability to evaluate evidence that supports or contradicts facts, conclusions, and points of view. In other words, you tend to look for and focus on evidence that supports your preconceived beliefs and opinions, and ignore the evidence that questions these opinions.

The problem: You can be wrong. The risk of your company’s interests with this prejudice can blind you to a result that you thought was impossible and that you are not prepared for. This is far more common when external and out of control factors affect the outcome of your decision.

The solution: Start making peace with your desire to be right. People want to be right, it’s in our human nature. Being aware of this desire can do a lot for you to combat the negative effects of confirmation bias. It is important to be able to process the emotional intelligence required to resist the need to be healthy at the expense of the best possible response from everyone involved.

And finally, you will learn to house what Buddhists call “beginner spirit”. This is a malleable, curious and open mind that enables us to learn new things. If you focus on learning new information instead of always trying to be correct, it is difficult for cognitive prejudices to attack you.

We all have prejudices and they are not a sign of weakness. The weakness is to ignore these prejudices. Just being aware of your prejudices is the first step in combating them.