<aside> 📌 Humans are prone to thinking errors: cognitive biases Mental shortcuts that exist to help us make quick decisions in moments of uncertainty, but that also impair our ability to think clearly Many if our cognitive biases exist because in some circumstances the cost of a false negative is much higher than the cost of a false positive: we evolved biased towards behaviors that promoted survival and reproduction They often operate by narrowing our focus on a type of information, by overlooking other kinds - quick, but uninformed decision-making Starred (⭐) those I found considerably interesting in general and VC investing
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We notice things that are already primed in memory or repeated often - our brain is more likely to notice stuff that was recently loaded in our memory
⭐ Availability heuristic: (or availability bias) we rely on immediate examples that come to our mind when evaluating a specific topic, concept, method or decision - we operate on the notion that if we can recall something, it's because it's important and representative - thus we weigh our judgements toward recent information (e.g.: making opinions/decisions biased toward latest data/trends/events/news, either received or available)
Attentional bias: a person's perception is affected by selective factors in their attention; may explain an individual's failure to consider alternative possibilities when occupied with an existing train of thought (e.g.: cigarette smokers possess and attentional bias for someking-related cues around them, due to their brain's altered reward sensitivity); associated with clinically relevant symptoms such as anxiety or depression
⭐ **Illusory truth effect:** (aka reiteration effect) tendency to believe false information to be correct after repeated exposure; people rely on whether the information is in line with their understanding or if it feels familiar, linked to hindsight bias; key driver of many trends, used in media, advertising and political propaganda; "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie" as the infamous Goebbels would claim
⭐ **Mere exposure effect** (aka familiarity effect): a preference for things merely because we are familiar with them, - applicable in advertising, investment selection, technology adoption, resistance to change, ‣
⭐ **Context effect: influence of environmental factors on one's perception of a stimulus** - massive effects on marketing, consumer decisions, product design, UX
Cue-dependent forgetting / retrieval failure: failure to recall information without memory cues, which can be semantic (groups of words,), state-dependent (a state of mind), or context-dependent (and environmental state)
Mood-congruent memory bias: tendency to more easily remember events that have a congruence with one's current mood
⭐ Frequency illusion (aka Baader-Meinhof Phenomenon): feeling that something is occurring more often than usual when it's not true - after noticing something for the first time, there is a tendency to notice it more often, while there is a huge difference between something happening a lot, and something you've started to detect a lot (e.g.: when you spot a cognitive bias once, you will be more likely to see it everywhere); the brain seems to be excited about learning/investing into something new, and selective attention occurs; sometimes reinforced by a process of confirmation bias (you start agreeing that yup, you are definitely seeing it more often) Mix it with social proof theory (someone who doesn't know how to act or think will imitate other people, or turn to peers for guidance) + confirmation bias and you will get an idea firmly stuck in your mind Example: someone gives you a "hot" investment tip, you learn only a little about it, you start to notice mentions and success stories, you see successes everywhere and somehow your FOMO grows
⭐ Empathy gap: people underestimate the influences of visceral drives and emotions on their own attitudes, preferences, and behaviors; we are "state-dependent" (if angry, it's more difficult to understand what it's like to be calm; if in love, it's more difficult to understand what it's like for one to be not) - if you are emotionally invested into something, it might be more difficult to understand what's it's like not to be
Bizarreness effect: tendency of bizarre material to be better remembered than common material; scientific evidence of its existence is contested
Humor effect
Von Restorff effect: predicts that when multiple homogeneous stimuli are presented, the stimulus that differs from the rest is more likely to be remembered
Negativity bias
Publication bias
Omission bias
Confirmation bias
Congruence bias
Post-purchase rationalization
Choice-supportive bias
Selective perception: Selective perception is the process by which individuals perceive what they want to in media messages while ignoring opposing viewpoints
Observer-expectancy effect
Experimenter’s bias: In research, an experimenter bias, also known as research bias, occurs when a researcher unconsciously affects results, data, or a participant in an experiment due to subjective influence. It is difficult for humans to be entirely objective which is not being influenced by personal emotions, desires, or biases. It is a broad term to identify the behavior all people exhibit to tend to "see things" based on their particular frame of reference.
Observer effect