Biases

Bias

Your brain often plays tricks on you and takes mental shortcuts.  Nothing wrong with that per se.  Our ancestors needed those shortcuts to decide in a split-second on fight or flight.  Without those shortcuts, our race never would have survived.

In our modern times, those genetic shortcuts, nevertheless, often lead to unfavorable and costly consequences.

Being aware of those cognitive biases will help you to slow down and think a bit longer before making impulsive decisions.

You can never be immune to them, but the more you know, the safer you will be from self-deception.  You should work to reduce your biases, but to say you have none is a sign that you have many (jump straight ahead to Bias Bias).

As there are hundreds of biases, I have focused only on biases that make you do dumb things with your hard-earned money.

We are all dumb, but only the smart ones learn from it.

Now I would like to invite you to learn how you can get the upper hand over those nasty biases, how to achieve a more neutral viewpoint, and how to use good judgment to Tacomob in a more effective manner.

I hope you remember them, because there will be a test—it’s called the rest of your life.

Read critically keeping your mind open to the possibility that it does not work the way you think it does:

Affective Forecasting Error

Ambiguity

Anchoring

Argument from Authority

Attentional Bias

Backfire Effect

Bandwagon Effect

Bias Bias or Bias Blind Spot

Bias from envy and jealousy

Bigness Bias

Blame Bias

Certainty Bias

Confirmation Bias

Conformity Bias

Conservatism Bias

Contrast Effect

Correspondence Bias

Credulity

Current Moment Bias

Curse of Knowledge

Decision Heuristics

Decoy Effect

Delayed Gratification

Denomination Effect

Disposition Effect

Dunning-Kruger Effect

Economic Forecast Illusion

End of History Illusion

Endowment Effect

Envy

Extreme Discounting

Extremeness Aversion

Fading Affect Bias

Failing to understand Exponential Growth and Compound Interest

False Consensus Bias

Familiarity

Fast Thinking Bias

Forecasting Folly

Framing Bias

Fundamental Attribution Error

Gambler’s Fallacy

Greed

Halo Effect

Hedonic Treadmill

Herd Behavior or Herding

Hindsight Bias

Home Bias

Hot-Cold-Empathy Gap

Ignoring History Bias

Ignoring long-term importance of money

Illusion of control

Illusion of skills

Illusory Superiority

Impact Bias

Indecision Bias

Information Bias

Ingroup Bias

Intuition

Insensitivity to sample size

Just-World-Bias

Lake Wobegone Effect

Law of small number

Loss Aversion

Memory Bias

Mental Accounting

Mere-Exposure Effect

Money-Can-Not-Buy-Happiness-Bias

Money Illusion

My-Current-Trade-Must-Be-A-Winner-Bias

Myopic Loss Aversion

Neglect of Prior Base Rates Effect

Neglect of Probability Bias

Normalcy Bias   and  here

Not-Invented-Here-Syndrome

Optimism

Ostrich Effect

Overconfidence

Paradox of Choice

Pessimism

Planning Fallacy

Presentism

Projection Bias

Reactance

Recency Bias

Regression to the Mean Fallacy

Regret Aversion

Relative-Dollar-Bias

Representative Bias

Scarcity Bias

Seer-Sucker Illusion

Self-Serving Bias

Self-enhancing Transmission Bias   and here

Social Comparison Bias

Status Quo Bias

Stubborn-Insistence-On-Comparing-The-Present-To-The-Past-Bias

Survivorship Bias

Sunk Cost Fallacy

This-Time-Is-Different-Bias

Timescale Bias

Unpredictability Ignorance

Uncertainty Effect

Weakness of Will

Well-Travelled Road Bias

Zero-Risk Bias

 

All the above biases are singularly powerful on their own.  But when they are involved in combinations, they are even more potent and create lollapalooza effects.  (A lollapalooza effect is a combination of factors, filtered through multidisciplinary models, that leads to an outstanding result or an outrageous example of its kind).

But with practice and conscious awareness (awareness is the greatest agent for change), you become more alert of these biases, and can prevent them from getting you into too much turmoil.

How much turmoil?

Well, the amount that you are swayed by each of these biases depends on how much you believe in them.  So, just reading, remembering and believing (!) these posts should allow you to fight back against the belief biases, helping you to make decisions that will increase your future happiness.

Want to learn the ultimate cognitive-biases-life-hack?  That post contains a link to an awesome info-graphic with all biases categorized and at one massive glance.

 

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