Is your Radar set to Detect Cognitive Traps?

Articles Cognitive Biases Decision Making

Thinking Errors: Part One

Posted: September 15, 2015 Written by: W.B. “Bud” Kirchner

“Many complain about their memory – few about their judgment.” ~ Francois de la Rochefoucauld

Realistically, there are lots of reasons to complain (at least question) about your (our) judgment and sadly while ignorance may be bliss – it is rarely profitable!

This is the first in a series of articles to focus on what could generally be categorized as “thinking errors.” I have tried to focus on errors I have seen (often) in a business context and those that would have maximum impact on a business builder or manager.

Cognitive “Traps”

Perhaps, the best description of the situation is that of Daniel Kahneman, nobel laureate, economics, who states – there are numerous cognitive “traps.” This broad based metaphor could easily include anything leading to cognitive dissonance including areas such as cognitive biases, statistics, philosophy, memory, behavioral economics, heuristics and social contexts.

This should not be a foreign concept since thinking errors (biases) have made their way into popular culture under catchy names such as:

“Animal Spirits”

“Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism,” by George A. Akerlof and Robert J. Shiller

“Black Swan”

“The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: On Robustness and Fragility…,” by Nassim Nicholas Taleb

I will provide you a general overview of cognitive biases and then an introduction to other thinking errors. My structure, categorization and semantics are subjective but I believe pragmatic. For those wanting a more formal/traditional presentation of categories and titles see the Wikipedia article “List of Cognitive Biases.”

Not All Biases Are Irrational

It is hard to know what is the right bite size piece(s) re thinking errors – there has been volumes written on the subject much of it in the academic/scientific literature.

Let me start with a simple alert to those ignorant and/or egotistical (unfortunately they are not mutually exclusive) business people who think their perception and analysis is flawless and believe that if they had some additional influence (internal or external), they would recognize it in this context. Guess what? You wouldn’t!

Incidentally, it is important to note – not all biases are irrational. Indeed biases may be completely rational yet still produce thinking errors and undesirable outcomes.

Incidentally, it is important to note – not all biases are irrational. Indeed biases may be completely rational yet still produce thinking errors and undesirable outcomes.

This area of discussion also brings us to the overall subjectivity of information we are processing. A good illustration is our vision. Start by familiarizing yourself with the Shepard’s Tables Illusion, then think about this: the largest part of our brain is devoted to vision and yet it makes simple mistakes and even when pointed out we can’t “see” the truth. Remember our expectations determine how we perceive the world; even if the way we see the world is actually an illusion.

This area can also get quite philosophical. See the TEDTalk by philosopher Ruth Chang. She does a fascinating job of explaining the decisions she calls “hard choices.” She says these decisions are (rightly so) decided by reasons we create and involve a relationship beyond greater, lesser and equal (“on a par”). Interesting juxtaposition with the balance of these s!

Now, back to the matter at hand!

A Couple Caveats

  • As you might imagine there are very detailed descriptions of these biases. I have intentionally drafted a stepped down version (think “field guide”) so you can quickly recognize it and proceed accordingly, get more details or simply change your mind/approach.
  • Before you launch into additional material, let’s be clear that my (to be seen) ability to list off all these thinking errors and put some context around them is not to be construed as an effort to suggest I am not prone to many (if not all). Lest I forget my propensity for such errors – I have a wife, children and many colleagues who remind me constantly!

What To Look For

What is the (intended) value proposition of these articles? First, to get a number of ‘traps’ on your radar screen that you need to avoid. Second, to give you some ideas both prophylactic and therapeutic. So my second value proposition is dependent of achieving the first.

As an overview of this topic check out:

“We tend not to look for what we don’t see.” ~ Daniel Kahneman, from “What You See Is Not All There Is” interview on Inc.com

In that interview Kahneman goes on to say that when we are presented with something hard or easy we go for easy. Well there is nothing easy about looking at ourselves honestly or trying to understand our thinking errors so I commend you for being here and your efforts to see what most people do not see.

About the Author: W.B. “Bud” Kirchner is a serial entrepreneur and philanthropist with more than 50 years of business success. He is not a scientist or an academic but he does have a diversified exposure to neuroscience, psychology and related areas. Generally speaking, the ideas he expresses here are business-angled expansions of other people’s ideas, so when possible, he will link to the original reference.