As biased as it gets

 The previous time, I raised the subject of the rationality that we have in our everyday behaviors. Basically, no. I tried to raise the different point of view. That we do not actually act that rational when we take everyday decisions. So, when I asked for comments from a good friend of mine, he was not sure about the practicality of my article. This time I will try to be a bit more practical.

I will to explain three main cognitive biases that pretty much most of us have. But first let me tell you what a cognitive bias is. Let's say, that you were raised in a standard social environment, for example a small town in your country. In this town, all the citizens interact with one another on everyday occasions (going shopping and meeting a friend, go to the police station etc). So basically, all the knowledge you have for the social environment is from the town that you had live all your life.

The information that you have for the others in your town is a mix between how they act towards you and how you interpret their actions. If, for example, you are a postman and everybody is shouting at you and calling you names while you are doing your job, you may believe that all the others around you are savages and that you should better just leave the place and relocate in another area. Or you may believe that you are inadequate for this job and eventually find a new one. Thus, it is not just what the signal is but also what we understand from that. A cognitive bias now, is a false translation of these external  signals. The funny thing is that we all make the same mistakes in certain areas or to put it differently we misinterpret some things.

For example:

1    Gambler's fallacy: Imagine you go to a casino. You sit in a roulette table and you decide to play with the black and red color instead of the numbers. You find out that the last ten times it was the red color that has  appeared. What are you going to choose? Well, whatever you decide still falls in the 50% - 50% odds. The history of  the roulette does not give us any information for what it will come up this time. So, choosing the black color still gets you the same chances.

2     Hindsight bias: For me at least, it is quite common, that when an event of my life has finished it seems so obvious and predictable. Take for example, when you pass an important test. When you get your grade it seems so obvious that you would have that results. But that was not the case when you initially enrolled, was it?

      3.   IKEA effect: there are academic studies that show that things that we do / create  in our own, we tend to believe that they have higher value that they actually have. A research that has been carried out found that the price that one would want so as to sell an IKEA furniture that has assembled himself was considerable higher than what others were willing to pay for that piece of furniture.

In the following video, Dan Ariely is examining the IKEA effect using Origami creations.

P.S. Bias blind spot: The belief that one is less biased than all the other, or that one can identify more biases than the others.