Unit1textBWhydosmartpeopledodumbthings?1Orthodoxviewsprizeintelligenceandintellectualrigorhighlyinthemodernrealmofuniversitiesandtechindustryjobs.Oneoftheunderlyingassumptionsofthisvaluesystemisthatsmartpeople,byvirtueofwhatthey'velearned,willformulatebetterdecisions.Oftenthisistrue.Yetpsychologistswhostudyhumandecision-makingprocesseshaveuncoveredcognitivebiasescommontoallpeople,regardlessofintelligence,thatcanleadtopoordecisionsinexpertsandlaymenalike.2Thankfullythesebiasescanbeavoided.Understandinghowandinwhatsituationstheyoccurcangiveyouanawarenessofyourownlimitationsandallowyoutofactorthemintoyourdecision-making.3Oneofthemostcommonbiasesiswhatisknownasthefundamentalattributionerror.Throughthispeopleattributethefailuresofotherstocharacterflawsandtheirowntomerecircumstance,subconsciouslyconsideringtheirowncharacterstobestainless.“Jenkinslosthisjobbecauseofhisincompetence;Ilostminebecauseoftherecession.”Italsoleadsustoattributeourownsuccesstoourqualifications,discountingluck,whileseeingothers'successastheproductofmereluck.4Inotherwords,wetypicallydemandmoreaccountabilityfromothersthanwedofromourselves.Notonlydoesthisleadtopettyjudgmentsaboutotherpeople,italsoleadstofaultyriskassessmentwhenyouassumethatcertainbadthingsonlyhappentoothers.Forexample,youmightassume,withoutevidence,thatthepriceofyourhousewillgoupeventhough90percentofthemhavedroppedinprice,becauseyouyouyourselfaremorecompetent.5Confirmationbiasissometimesfoundtogetherwithfundamentalattributionerror.Thisonehastwoparts.First,wetendtogatherandrelyuponinformationthatonlyconfirmsourexistingviews.Second,weavoidorvetothingsthatrefuteourpreexistinghypotheses.6Forexample,imaginethatyoususpectyourcomputerhasbeenhacked.Everytimeitstallsorhasalittleerror,youassumethatitwastriggeredbyahackerandthatyoursuspicionsarevalid.Thisbiasplaysanespeciallybigroleinrivalriesbetweentwoopposingviews.Eachsidepartitionstheirownbeliefsinalogic-proofloop,andclaimstheiropponentisfailingtorecognizevalidpoints.Outwittingconfirmationbiasthereforerequiresexploringbothsidesofanargumentwithequaldiligence.7Similartoconfirmationbiasistheoverconfidencebias.Inanidealworld,wecouldbecorrect100percentofthetimewewere100percentsureaboutsomething,correct80percentofthetimewewere80percentsureaboutsomething,andsoon.Inreality,people'sconfidencevastlyexceedstheaccuracyofthosejudgments.Thisbiasmostfrequentlycomesintoplayinareaswheresomeonehastodirectevidenceandmustmakeaguess-estimatinghowmanypeopleareinacrowdedplaza,forexample,orhowlikelyitwillrain.Tomakemattersworse,evenwhenpeopleareawareofoverconfidencebias,theywillstilltendtooverstatethechancesthattheyarecorrect.Confidenceisnoprophetandisbestusedtogetherwithavailableevidence.WhenwitnessesarecalledtotestifyInacourttrial,theconfidenceintheirtestimonyismeasuredalongwithandagainsttheevidenceathand.8Theavailabilitybiasisalsorelatedtoerrorsinestimation,inthatwetendtoestimatewhatoutcomeismorelikelybyhoweasilywecanrecountanexamplefrommemory.Sincetheretentionandretrievalofmemoriesisbiasedtowardvivid,sensational,oremotionallychargedexamples,decisionsbasedonthemcanoftenleadtostrange,inaccurateconclusions.9Inactionthisbiasmightleadsomeonetocancelatripto,forexample,theCanaryIslandsbecauseofareportthatthebiggestplanecrashinhistoryhappenedthere.Likewisesomepeoplemightstopgoingoutatnightforfearofassaultorrape.10Repellingtheavailabilitybiascallsforanempiricalapproachtoaparticulardecision,onenotbasedontheobscuredrealityofvividmemory.Iftherealowincidenceofdisaster,likeonlyoneoutof100,000planelandingsresultsinacrash,itissafetoflytotheCanaryIsland.Ifoneoutofonemillionpeoplewhogooutisassaulted,itissafetogooutatnight.11Thesunkcostfallacyhasaperiodicapplicationandwasfirstidentifiedbyeconomists.Agoodexampleofhowitworksisthecasinoslotmachine.Gamblerswithahighthresholdforriskputmoneyintoaslotmachinehopingforabigreturn,butwitheachpullofthelevertheylosesomemoneyplayingtheodds.Iftheyhavebeenpullingthelevermanytimesinarowwithoutsuccess,theymightdecidethattheyhadbetterkeepspendingmoneyatthemachine,ortheywillhavewastedeverythingtheyalreadyputin.12Thetruthisthateverypulloftheleverhasthesamewinningprobabilityofnearlyoneinatrillion,regardlessofhowmuchmoneyhasbeenputinbefore—thepreviousplaysweresunkcosts.13Ineverydaylifethiscanleadpeopletostayindamagingsituationsbecauseofhowmuchtheyhavealreadyputin,stuckontheerroneousbeliefthatthevalueofthattimeorenergytheyhaveinvestedwilldecayordisappeariftheyleave.Thewisestcourseistorecognizetheeffectsofthesunkcostfallacyandtoleaveabadsituationregardlessofhowmuchyouhavealreadyinvested.14Whiletherearestillmorebiases,thekeytoavoidingthemremainsthesame:Whenadecisionmatters,itisbesttorelyonwatertightlogicandacarefulexaminationoftheevidenceandtoremainawarethatwhatseemslikegoodintuitionisalwayssubjecttoerrorsofjudgment.