What are cognitive biases and heuristics?
Knowing what cognitive biases and heuristics are, is the basis for making good decisions. Unfortunately, not everyone knows what these terms mean, so let’s fix that.
A cognitive bias is a systematic error in reasoning that happens when people process and interpret information in the world, and these errors affect their decision-making. You can think of it as an optical illusion, but it happens in our brain. Our brain misinterprets reality.
Look at this picture. The lines between the white and black squares are crooked. Now take your ruler, put it against the lines and you will see that the lines are straight. Put the ruler down again, look at the picture again, what is happening, you still see them crooked, yes, but now you know that they are straight, and you won’t be fooled anyone. Cognitive bias works on the same principles, even if we know about the bias, we are still subject to it, but we already know that it is not reality, and we can make a different decision.
Let’s take a simple example of cognitive bias. Consider, for example, availability bias. The brain has created a shortcut that tells it that what is easier to recall is more likely to happen. Because of this, many people are much more afraid of flying than driving a car. One immediately imagines a plane crash because when it happens, it’s all over the TV news, newspapers, and social media. However, if we look at the statistics, driving a car is 2500 times more dangerous (source Modern Railways, 2000 (DETR Survey), data from 1990-2000). As with optical illusions, this bias will not go away by learning about it and finding statistical data. Nevertheless, being aware of the bias will help us make better decisions.
Now that we’ve explained what cognitive biases are, let’s look at heuristics. Heuristics are mental shortcuts that allow us to solve problems and make decisions quickly and efficiently. Thanks to them, we save a lot of time and energy. However, they may come to a wrong conclusion and lead to cognitive biases.
If we look again at our example of the availability bias, we’ll see that it’s actually based on the availability heuristic, meaning that in some cases it can be useful for us to judge probability based on how easy it is to recall a situation in our memory. If I ask you, for example, if there is more sunshine in summer or winter, you will not count these days, but you will certainly remember how in summer you go swimming and come home late, while it is still daylight, and in winter as early as 4 o’clock you are sitting at home because it is already dark. In summer in the Czech Republic there are around 200 hours of sunshine per month and in winter around 40 hours.
Or if I ask you if it rains more in summer or winter in Rio de Janeiro, you will probably think of some flooding in the summer months and conclude that it rains more in summer than in winter, without counting the amount of precipitation, and you are right. In summer it is around 130 mm per month and in winter around 50 mm per month.
In summary, heuristics are mental shortcuts that allow us to make quick decisions, but on the other hand, they can lead to systemic errors, which we call cognitive biases. Heuristics and cognitive biases are numerous and closely related. Other examples are: affective heuristics (how we rely on emotion instead of concrete information), confirmation bias (when we focus on information that confirms our opinions), the ikea effect (we place more value on things we helped create), the anchoring effect (explaining why discounts are irresistible to us) and many others. We will talk about them in future articles, so you should definitely stay tuned.
You might be wondering why you should even care about heuristics and biases. The more aware we are of heuristics and cognitive biases, the better we can make decisions because we avoid unnecessary errors in judgment, understand what influences the decisions of others, and can use heuristics and biases to our advantage.
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