Psychology

What is the anchoring effect? How do we use it in everyday decision making? The anchoring effect is a cognitive bias where you depend too heavily on an initial piece of information when making decisions. This can lead to bad judgments and allows you to be biased by information that’s often irrelevant to the decision at hand. Learn how the anchoring effect in psychology works, why it can lead to bias, and how to overcome the anchoring effect.

What is confirmation bias? What can cause confirmation bias? Confirmation bias is the tendency to find and interpret information in a way that confirms your prior beliefs. We selectively pay attention to data that fit our prior beliefs and discard data that don’t. Better understand the above confirmation bias definition and how confirmation bias occurs in decision making.

What is the “What You See is All There Is (WYSIATI)” phenomenon? How does it work? Why does WYSIATI lead to bad decisions? What You See is All There Is (WYSIATI) is a cognitive bias described by Daniel Kahneman in Thinking, Fast and Slow. WYSIATI says that when presented with evidence, especially those that confirm your mental model, you do not question what evidence might be missing. Learn how the “What You See is All There Is” phenomenon affects your decision making, and learn how to overcome it.

What is global thinking? How does it differ from narrow framing, and why does it help in decision-making? Global thinking is the ability to see the big picture and consider every combination of options to find the optimum one. Global thinking is mentally taxing and therefore hard to do, and we usually fall back on “narrow thinking” instead. We’ll cover how global thinking differs from narrow framing and how global thinking can help you make better decisions.

What is the sunk cost fallacy? What are some examples of the sunk cost fallacy? The sunk cost fallacy is the tendency to keep investing time or money in something because you’ve already invested a lot of time, money, or resources into it. In doing so, we separate life into separate accounts, instead of considering the global account. Learn what the sunk cost fallacy is and why it’s so easy to fall for it.

What is availability bias? When does it occur, and how can you avoid it? Availability bias is the tendency to place more importance on information we can easily remember. The more easily you remember something, the more significant you perceive what you’re remembering to be. In contrast, things that are hard to remember are lowered in significance. Learn how the availability bias, also known as the availability heuristic in psychology, hurts our thinking skills. We’ll cover the role of availability bias in the media and what you can do to overcome availability bias.

What is the status quo bias? What are some examples of the status quo bias? The status quo bias is the tendency to compare outcomes to the baseline of your experiences. This bias affects how you perceive gains and losses. We’ll cover two status quo bias examples and how it affects your expectations and emotional response when outcomes meet, or fail to meet, your expectations.

What is price anchoring? How does it affect sales, and how does it affect what you pay for your purchases or how much you donate to charity? Price anchoring is the practice of giving a price point for a sales item or donation to influence consumer or donor decisions. Price anchoring is based on the psychological principle that, when shown an initial piece of information, you bias toward that information, even if it’s irrelevant to the decision at hand. We’ll cover how price anchoring works and how you can keep it from overinfluencing your decisions if you’re the customer.

What is the halo effect? What is a good halo-effect example? The halo effect is a bias that says that if you think positively about something, it extends to everything else you can think about that thing. This is a cognitive bias that may lead to bad decisions. Learn the meaning of the halo effect in psychology, why we’re vulnerable to it, and how it works in a halo effect example.