A Guide to Common Cognitive Biases
Summary
A practical guide to cognitive biases that affect judgment, risk evaluation, investing, product decisions, and management.
A Guide to Common Cognitive Biases
Cognitive biases are systematic patterns that distort judgment.
They matter because smart people can still make predictable mistakes when information, emotion, incentives, and uncertainty interact.
When you only see evidence that supports your view
Use:
- Confirmation Bias : check whether you search for supporting evidence more than disconfirming evidence.
- Availability Heuristic : check whether memorable examples feel more common than they are.
When numbers or first impressions dominate judgment
Use:
- Anchoring : notice when the first number or idea controls later estimates.
- Base Rate : compare your case with the underlying frequency before trusting a vivid story.
When loss and past investment distort choices
Use:
- Loss Aversion : identify when fear of losing weighs more than potential gain.
- Sunk Cost Fallacy : avoid continuing only because of past investment.
- Status Quo Bias : check whether doing nothing feels safer than it really is.
When success stories mislead you
Use:
- Survivorship Bias : ask what failed cases are missing from the sample.
- Selection Bias : check whether the data was selected in a way that distorts the conclusion.
Simple bias check
Before a major decision, ask:
- What evidence would prove me wrong?
- What base rate should I compare this with?
- What past investment am I trying to justify?
- What examples are missing from the data?
- What would I choose if this were a new decision today?