IIFTA

The webinar is about the cognitive bias and sources of error. It was hosted by the Empower people with the moderator named Sumathi and Shivani.

 Cognitive bias is a systematic error in thinking that occurs when people are processing and interpreting information in the world around them and affects the decisions and judgments that they make.

The human brain is powerful but subject to limitations. Cognitive biases are often a result of your brain's attempt to simplify information processing. Biases often work as rules of thumb that help you make sense of the world and reach decisions with relative speed.

Some of these biases are related to memory. The way you remember an event may be biased for a number of reasons and that, in turn, can lead to biased thinking and decision-making.

Other cognitive biases might be related to problems with attention. Since attention is a limited resource, people have to be selective about what they pay attention to in the world around them.

Because of this, subtle biases can creep in and influence the way you see and think about the world.

The concept of cognitive bias was first introduced by researchers Amos Tversky and Daniel Kahneman in 1972. Since then, researchers have described a number of different types of biases that affect decision-making in a wide range of areas including social behavior, cognition, behavioral economics, education, management, healthcare, business, and finance.

Cognitive Bias vs. Logical Fallacy

People sometimes confuse cognitive biases with logical fallacies, but the two are not the same. A logical fallacy stems from an error in a logical argument, while a cognitive bias is rooted in thought processing errors often arising from problems with memory, attention, attribution, and other mental mistakes.

Everyone exhibits cognitive bias. It might be easier to spot in others, but it is important to know that it is something that also affects your thinking. Some signs that you might be influenced by some type of cognitive bias include:

Only paying attention to news stories that confirm your opinions

Blaming outside factors when things don't go your way

Attributing other people's success to luck, but taking personal credit for your own accomplishments

Assuming that everyone else shares your opinions or beliefs

Learning a little about a topic and then assuming you know all there is to know about it

When you are making judgments and decisions about the world around you, you like to think that you are objective, logical, and capable of taking in and evaluating all the information that is available to you. Unfortunately, these biases sometimes trip us up, leading to poor decisions and bad judgments.

Actor-observer bias: This is the tendency to attribute your own actions to external causes while attributing other people's behaviors to internal causes. For example, you attribute your high cholesterol level to genetics while you consider others to have a high level due to poor diet and lack of exercise.

Anchoring bias: This is the tendency to rely too heavily on the very first piece of information you learn. For example, if you learn the average price for a car is a certain value, you will think any amount below that is a good deal, perhaps not searching for better deals. You can use this bias to set the expectations of others by putting the first information on the table for consideration.

Attentional bias: This is the tendency to pay attention to some things while simultaneously ignoring others. For example, when making a decision on which car to buy, you may pay attention to the look and feel of the exterior and interior, but ignore the safety record and gas mileage.

Availability heuristic: This is placing greater value on information that comes to your mind quickly. You give greater credence to this information and tend to overestimate the probability and likelihood of similar things happening in the future.

Compiled by; Indrani Kukkadapu.