Cognitive Biases

Examples of cognitive biases

Survival bias happens when you are examining historical information based only on companies that have survived but not ones that have went bankrupt or out of business

Confirmation bias happens when you only look for information that confirms and supports your existing beliefs.

Overconfidence bias happens when an person puts too much faith in his own knowledge and experience and completely ignoring their limits.

Authority bias - people are more likely to trust and take orders from individuals with more authority.

Availability heuristic bias happens when we base our decisions, behaviour and thought process on memories we recall quickly and easily forgetting the bigger picture.

Conformity bias is our tendency to when we align our thoughts and beliefs with the crowd without thinking independently. Basically, forgetting to put on our contrarian hat.

Anchoring bias happens when we base a complicated decision on a single piece of information.

Reciprocity bias is the impulse to reciprocate actions others have done towards us.

Simple psychological denial bias happens when truth is too painful to acknowledge and we chose to stay in denial of it.

Liking/disliking distortion bias is when we are more or less likely to take advice and believe people who we like or dislike.

Incentive caused bias is when people behave in a certain way due to being incentivised to do so.

Negativity bias is when positive, neutral and negative events of equal intensity occur but the negative events have much greater psychological impact compared to the positive and neutral ones.

Fallacy of composition bias happens when one assumes that what is true of the parts is always true of the whole.