Cognitive Biases and decision making

I’m sure anyone who works in the field of complex decision making is aware of the impact of personal bias.

I still remember a professor who spent six months and an excessive amount of grant money building more elaborate experimental rigs.  He was testing a theory about the settling patterns of small particles in a fluid flow, and did not get the answer he had expected.  For those keeping score, the laws of physics remained unimpressed with the new, expensive rigs and kept doing what they’d always done.

But decision making biases can be more insidious than that, especially in complex systems wiith high levels of uncertainty, like ecology or economic modelling/budget forecasting. 

It’s true that good physical and stochastic models can go a long way to lower uncertainty, and multicriteria decision analysis can help in sorting and ranking a wide range of factors, simple cognitive bias can trump the most well planned decision framework.

The first step in eliminating these biases is the ability is to understand their existance.  The link below is a beautifully rendered study guide to a range of cognitive biases.  A couple of my “favourites”

• The texas sharp shooter fallacy: The fallacy of selecting or adjusting an hypothesis after the data has been collected, which makes it impossible to fairly test the hypothesis.  The name refers to the analogy of shooting a bunch of bullets into a wall, drawing a circle around a closely clustered set and declaring that was your target.
• The zero-risk bias: The tendency to try to reduce a small risk to zero over acheiving a greater reduction in a larger risk.
• Planning fallacy: The tendency to underestimate task completion times (honestly, who hasn’t commited this one?)

Hope you find it useful.

Cognitive Biases - A Visual Study Guide by the Royal Society of Account Planning

Comments

[John Milferd]

Great Blogs!This was really nice lists of post and the desire in order to eliminate bias.Thanks for sharing this very informative post...