12 Cognitive Biases Explained: How to Think Better and More Logically

1. Anchoring Bias

We humans usually completely rely on the first piece of information

that we receive, no matter how reliable it is.

When making decisions, this initial information

has a tremendous effect on our brains.

• If someone offers to sell you a car for $30,000, and a week later drops the price to $20,000, it seems like a great deal. However, if the initial price was $10,000 and then raised to $20,000, it would look like a terrible deal. Your judgment is heavily anchored to the very first number you heard.

2. Availability Heuristic Bias

People overestimate the importance of the information

they have available to them,

often based on what is most visible rather than factual.

• Many people fear terrorism because they see it constantly on the news. In reality, you are 55 times more likely to be killed by a falling television than by a terrorist attack. People base their decisions on the stories they hear rather than actual facts and statistics.

3. Bandwagon Effect

This occurs when people believe or do something simply

because that is what the rest of the world is doing.

It is essentially following the crowd

without independent thought.

• People may vote for a specific candidate or buy a particular stock just because it is currently the most popular choice. In business management, the opposite of this is called “groupthink,” where individuals suppress their own dissenting ideas to agree with the majority, which companies try hard to avoid.

4. Choice Supportive Bias

People have a strong tendency to defend a decision

they made simply because it was their choice.

The belief is: “Just because I made the choice, it must be right.”

• If you buy an Apple computer over a Windows PC, you are far more likely to ignore the flaws of the Apple product while hyper-focusing on the downsides of the PC. We naturally want to validate our own decisions.

5. Confirmation Bias

We tend to listen to information that confirms what we already believe,

and we even interpret new information in a way that aligns

with our current beliefs.

• If you believe sugar is terrible for your health, you will instinctively search for articles titled “How bad is sugar for you?” rather than searching for any potential positive effects of blood glucose. This bias is extremely common and can be dangerous in scientific situations.

6. Ostrich Bias

The ostrich bias is the subconscious decision

to ignore negative information.

It often involves only wanting to consider the positive aspects

of a situation while pretending the negative parts do not exist.

• Smokers who know cigarettes are bad for their health may continuously ignore the negative implications, falsely believing they are an outlier and that nothing serious will happen to them.

7. Outcome Bias

We tend to judge the efficacy of a decision primarily

based on how things turn out,

rather than examining the logic and conditions

that existed at the time the decision was made.

• If a manager ignores the facts presented by their team and trusts their gut feeling, and the outcome happens to be successful, they may wrongly conclude that trusting their gut is better than using data. Basing a decision’s effectiveness solely on the outcome, even if luck was involved, leads to ruined thinking in the long run.

8. Overconfidence

Sometimes, a streak of success makes you overly confident,

causing you to make decisions based

on your opinion or gut rather than facts.

• A stock trader who successfully picks five profitable stocks may start believing they are infallible, leading them to stop looking at data and rely solely on their ego. Just because a coin lands on heads five times in a row does not change the 50% probability of the next flip.

9. Placebo Bias

When you strongly believe something will have a certain effect on you,

it often actually causes that effect.

• If a doctor gives you a sugar pill but tells you it is medicine, your strong belief that it will cure you can actually help you recover quicker. The mind is a powerful tool, and positive beliefs can genuinely influence outcomes and motivations.

10. Survivorship Bias

This bias occurs when you judge something based only

on the surviving information,

completely ignoring the failures that are no longer visible.

• Articles claiming “Five Things Millionaires Do Every Morning” ignore the countless people who do those exact same things but never became millionaires. Similarly, looking at an ancient city and assuming they had extreme engineering skills ignores the 90% of buildings that washed away centuries ago.

11. Selective Perception

Selective perception causes people to perceive messages

and actions according to their own frame of reference,

often overlooking information that contradicts their expectations.

• A smoker who loves soccer is far more likely to notice and absorb an advertisement about soccer while completely ignoring a negative advertisement about smoking. Your subconscious filters out what it does not want to process.

12. Blind Spot Bias

Also known as the “bias bias,”

this is the belief that you are less biased than the average person.

• If a student gives a teacher a gift and gets a good grade, the teacher will likely claim the gift did not affect their grading. However, if you ask that same teacher if other teachers are biased when given gifts, they will almost certainly say yes. We are all biased because we naturally think we are less biased than everyone else.