Availability Bias

Kinds of Biases, Assumptions, And Interpretations That May Affect The Seemingly Objective Observation Of Events

The most significant issue presented in Case 5 is the section on cognitive bias. It is interesting to learn that humans are systematically biased when predicting the future of a business enterprise.

Confirmation bias is a phenomenon wherein decision makers have been shown to actively seek out and assign more weight to evidence that confirms their hypothesis, and ignore or underweigh evidence that could disconfirm their hypothesis.

Intuitive decision making can be greatly influenced by biases and psychological traps. Jennifer Priestley and William Hakes in their paper titled “Problem Solving and Psychological Traps,” explained five such traps.

As Kahneman and Tversky investigated availability bias, it is considered a cognitive bias of a person, which makes people overestimate events’ probabilities associated with dramatic circumstances. In fact, a cognitive bias is an example of judgment deviation, which may occur in separate situations. Media on societal level usually cover all the memorable events and failures. Therefore, a cognitive bias is explained as a mistake in judgement, which could be caused mostly by experience.

When making irrational decisions, there are various factors that assists an individual in making those decisions (Schacter et al. 2014). First is the Frequencies and Probabilities factor (Schacter et al. 2014). For people, choosing an opinion based upon the number of times a situation has been repeated, frequency, is proved to be much easier than when they are asked to base their opinion on the number of times a situation might occur, probability (Schacter et al. 2014). Next is Availability bias where, a stored memory forces a person to believe that the situation has occurred more frequently, making the decision

Hammond, et al., (2013) suggest the effects of being biases could be reduce by using the proper tools, grasping the relevant facts, knowing if the decision maker judgment is intentionally clouded, and disciple your own experience, knowledge and ability to make the right

The overconfidence bias is the tendency for people to place unwarranted confidence in their judgments. Ninety-four percent of college professors believe they are above-average teachers; 90 percent of drivers believe they are above average; and when computer executives were given quizzes about their industry, they estimated they got 5 percent of the answers wrong—in fact, they had gotten 80 percent wrong.

According to Nisbett and Ross, the statistical information which most readers possess about the relative frequency of the two occupations is likely to be ignored if the anecdotal information is vivid and salient .They cite numerous experimental demonstrations of the biasing effects of vivid anecdotal information (1980, pp. 55-61). Hogarth (1980, pp. 31-33) suggests that if this anecdotal information is consistent or presents a consistent picture, it may discourage decision makers from seeking other information.

Finally, in terms of predictive bias, specifically in regards to retrospective reporting (i.e. interviews, checklists) is subject to recall bias as well as the prevalent issue that the recorded opinions may not reflect the opinions that were present in the past (Wright,

It is an ultimate consequence of the huge volume of accessible information. Several decision biases such as heuristic thinking, narrow framing, or choice bracketing are the consequences of limited attention. Psychological literature has identified two basic features of human information processing: i) selection of the set of items and ii) the processing of selected items by allocating limited mental resources (Pashler, 1998). Consider a situation where a student focuses on understanding the academic implications of taking PhD-level courses in the very first semester, s/he may be unable to focus on dissertation research carefully at the same time. Additionally, attentional biases can influence individual’s beliefs which depends on the memory and salient information processing (Tversky and Kahneman, 1973). Therefore, limited attention would be a special case of divided attention under heuristic thinking and information processing (Lacetera et al.,

A present bias is when a person chooses the quick reward, instead of waiting a-little bit of time for more.

Cognitive biases refer to the tendencies of thinking in certain ways that can lead to the systematic deviations from the standard of rationality or the good judgment which are often studied in behavioral economics and psychology. The reality of biases according to many psychological scholars is confirmed by the replicable research since there are numerous controversies regarding the classification and explanation of these biases. Heuristics can be termed as the effects of the information processing rules or the mental shortcuts that are used by the brain in production of decisions or judgments (Tversky, Amos; Kahneman, Daniel 1983). The different forms of biases are cognitive bias also known as “cold” bias and motivational bias also known as

This is known as the optimism bias. It can have positive and negative results. For example, when someone who has an optimism bias is sick they may not seek needed medical care because of the misperceived optimism. Optimism isn’t always negative as it can be associated with better health and better performance on the job. (Love, Kopec, & Guest, 2015)

Out of the 11 Cogniative Biases, the 4 that have impacted my life the most through experiences are Priming Theory, Contrast Principle, Status Quo Bias, and the Loss-Aversion Bias.