What is a cognitive bias and why should know about them?
A cognitive bias is a systematic tendency towards making a certain type of error in our decisions and judgments.
If we are aware that we’re in a circumstance where we might be affected negatively by one or more cognitive biases, then we have an opportunity to take countermeasures to offset the tendency to make such errors in our decisions.
Sunk cost fallacy
Let’s examine first a cognitive bias that counts for untold suffering and costs in most people’s lives. It’s called the “sunk cost fallacy.” It’s the tendency to make a decision to continue with a certain course of action because of our past investment, instead of considering the decision freshly, as if we hadn’t already invested in it.
Here are some examples:
“Our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made, especially the sacrifices of lives.” Donald Trump made this statement on August 21st, 2017 to justify the continuation of the U.S involvement in the conflict in Afghanistan. Assuming he was not just playing to the audience, he (and others) were not looking freshly at the options: “Knowing what we know now, about the costs and benefits, the risks and possibilities of continuing in this conflict (in contrast with quitting), would we choose freshly to continue in this conflict or not (without regard to costs incurred in the past)?” If the answer is “no” and we still continue in the conflict, we are “throwing good money after bad” and justifying killing more soldiers to “make up for” the soldiers who were already killed.
Can't waste the food
“I paid for this food; I’m going to finish it.” The money you paid for the food is gone. Imagine you hadn’t paid anything for the food. Then compare freshly the costs and benefits of finishing off what’s on your plate. You can more easily see if the benefits are more or less than the costs by thinking this way. You don’t get any additional benefits for finishing it just because you already paid for it.
Making up for what it's already cost me
“I’ve already spent two years majoring in accounting. Even though I don’t like it, I should finish it.” Why? Is suffering for another two years going to help pay for the suffering you’ve already tolerated? If you want to “make up for the suffering” you’ve already gone through, the best way is to end your suffering as soon as possible and get onto creating some joy in your life.
If my spouse changes, then it will have been worth it
“I’ve invested fifteen years in this marriage; I’m not going to quit now.” Again, whether or not it makes sense to end your marriage, has nothing to do with the “investment” you’ve already made. Here’s a simple test to find out whether or not you should seriously consider ending your marriage: Imagine, somehow, you were magically not married to this person. Yet you know how you would tend to get along and not get along with them if you two were married. Knowing this, would you choose to marry them newly? If the answer is “no,” while factoring in the one-time transaction costs of getting a divorce, why wouldn’t you get divorced?
Can't just get rid of them
“I just bought these clothes; I don’t think I will wear them, but I can’t throw them or give them away.” To admit that we made a mistake (and incurred a loss than cannot be recouped) can occur as painful. By not getting rid of the clothes we’re not going wear, we’re trying to avoid accepting the loss that is already lost.
A countermeasure using imagination
We can often avoid the error of the sunk cost fallacy by just imagining that whatever circumstance we are in was given to us with no cost. Example: some stranger just gave you the clothes. Without any past cost, knowing what you know now, would you continue to keep the clothes or get rid of them? Would you continue in the war or quit? Would you continue eating the food or stop? Would you finish your major or do something you love? Would you continue in your marriage or get out? If you imagine that you incurred no cost to be in your current circumstance, would you continue with it or not? Asking this question this way will likely give you a answer with less cost and more benefit.
Using this question to avoid the additional costs that falling for the sunk cost fallacy will hit you with.
Many more juicy cognitive biases
Learn about the many other juicy cognitive biases and their ability to steal from you without you even knowing it.
"I am normal" bias (also gender, family, religion, political belief, country, species)
Loss aversion bias
Sunk cost bias
(to be continued...)