Are Your Decisions as Rational as You Think?
In recent decades, researchers have uncovered a wide range of mental errors that derail our thinking and sway us from making rational choices and decisions. James Clear, author and researcher of behavioral psychology, talks about 5 of these errors that we are all subject to.
- Survivorship Bias: In a world where self improvement tips, tricks, and books have their own industry, we often pay attention to the best advice people give and the how tos of the most successful people in the industry -- and forget about some of the failures that came along the way. Success does not come with a one size fits all solution. We have to take more than one point of view into account when it comes to making a decision that is best for us.
- Loss Aversion: Often times we avoid failure by avoiding risk and trying the one thing that we have wanted to all along. The fear of failure often outweighs the triumph of success because people tend to have a scarcity mindset and try to protect what little or much they may have instead of seeing the possibility of what could be.
- Availability Heuristic: We have more information on our cell phones today then President Clinton did when he was in office. We are constantly bombarded with a lot of news from many different sources, so we think we are up to date and have a well rounded view of what is going on in the world. But the majority of the time, the media only reveals what they want you to know. What is actually happening in the world is much more than we are exposed to on a daily basis.
- Anchoring: Have you ever walked into a store with a set budget in mind then walked out with sometimes double the price? This happens as a part of the anchoring bias. If you walk into a store and see a product that is 10 times more than you wanted to spend, then you see an item that is only twice as much, you can often convince yourself that price isn’t so bad after all. Little did you know, that was the store’s plan to get you to spend more all along.
- Confirmation Bias: When you find information or support that confirms your pre-existing belief, you tend to devalue or undervalue what the truth of the matter is.
Have you ever slipped into one of these biases where it affected your decision-making? I can personally account to a time when I have fallen subject to each of these mental errors. The good news is, now that you know the common patterns, it will be much easier to recognize them and correct your bias so you can make the best decisions for you.