Bias & Decision-Making: Soo Stoopid

“In the end, no one is immune to the biases that lead to stupid decisions. Yet our reverence for IQ and education means that it is easy to rest on the laurels of our qualifications and assume that we are, by definition, not stupid.

Most researchers agree that, overall, the correlation between intelligence and successful decision-making is weak. The exception is when people are warned that they might be vulnerable to bias, in which case those with high IQs tend to do better. This is because while clever people don’t always reason more than others, when they do reason they reason better. Which just goes to say that we should all try to be a little more aware of how we make decisions – because you are probably more stupid than you think.” (New Scientist, 2020, p.49).

Common biases (of which there are a number) to be aware of include:

  • The Dunning-Kruger Effect:
    • Aka the bias of illusory superiority.
    • This is the tendency of people with low ability to mistakenly overestimate their competence.
    • The Dunning–Kruger effect is a close cousin of the better-than-average effect – the statistically impossible effect in which the majority of people rate themselves more favourably than average.
    • There’s also the reverse Dunning–Kruger effect, know as Imposter Syndrome, where a competent person feels like a fraud who is about to be found out.
  • The Endowment Effect:
    • Aka the tendency to value things more highly just because you own them.
    • This feeling is common, and leads us to make irrational decisions, like refusing to swap an item for something of higher value.
    • The endowment effect is one reason why the prospective purchaser of your old car will not pay the price you think it is worth.
  • The Status-Quo Bias:
    • Aka a preference for the current state of affairs, and the feeling that any change from this is a loss.
    • This bias is linked to our desire for familiarity, and the observation that we feel more regret for bad outcomes resulting from new actions than for bad consequences that arose from inaction.
    • It is one reason why you still drink Coke, when in blind tests you actually preferred a rival brand.
  • The Blind-Spot Bias:
    • Aka the tendency to recognise the impact of bias in other people’s judgements, but failing to see them in your own.
    • If you suffer from this (which you certainly do) you are not alone.
    • Everyone thinks they are less biased than other people.
    • This effect is related to the self-enhancement bias – the tendency to see yourself in a positive light.
    • This blind spot means you will not be able to adapt your behaviour, even if your errors of judgement are glaringly obvious when carried out by other people.

Reference

New Scientist. (2020) Why Clever People Make Stupid Mistakes. New Scientist. 01 August 2020, pp.4649.

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.