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Archive for the ‘Heuristic’ Category

There is an anchoring effect.

  • The Misconception: You rationally analyze all factors before making a choice or determining value.
  • The Truth: Your first perception lingers in your mind, affecting later perceptions and decisions.
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ThickCulture has found an interesting study that I really need to print out and read in detail at some point.  To quote the short abstract:

Reasoning is generally seen as a mean to improve knowledge and make better decisions. Much evidence, however, shows that reasoning often leads to epistemic distortions and poor decisions. This suggests rethinking the function of reasoning. Our hypothesis is that the function of reasoning is argumentative. It is to devise and evaluate arguments intended to persuade. Reasoning so conceived is adaptive given human exceptional dependence on communication and vulnerability to misinformation. A wide range of evidence in the psychology or reasoning and decision making can be reinterpreted and better explained in the light of this hypothesis.

If you read the longer abstract, you’ll see the following paragraph:

Our hypothesis is that the function of reasoning is argumentative… Skilled arguers are not after the truth but after arguments supporting their views.  This explains the notorious confirmation bias.

So what?

Well, the confirmation bias was the thing that started to bother me as a teenager.  I discovered that I could convince myself of almost anything if I argued about it.  The more I argued the more I believed it.  But I didn’t like the fact that something irrational was deciding my opinions for me so I started to track what I was thinking and rebel against it.

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I discovered heuristics reading psychology at university and they changed the way I thought about thinking forever.  I stopped believing that my thought processes were completely rational and started second-guessing myself a lot more.

 

What are heuristics?

Heuristics are defined by Wikipedia as:

simple, efficient rules, hard-coded by evolutionary processes or learned, which have been proposed to explain how people make decisions, come to judgments, and solve problems, typically when facing complex problems or incomplete information.

Sounds great, right?  But, as Wikipedia notes, these rules aren’t always good news because they:

work well under most circumstances, but in certain cases lead to systematic errors or cognitive biases.

 

The escalation of commitment heuristic

I was trying to explain the escalation of commitment heuristic to a work colleague the other day but I really struggled.  So I decided to write about it so I could get my head around it better.

The escalation of commitment heuristic is defined by Wikipedia as:

the phenomenon where people justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting that the decision was probably wrong.

 

Good money after bad

I used the initial example of a venture capitalist, who pours more money into an investee company to protect their initial investment, although it is clear that the company has become a poor investment.

I think its also relevant to people in their careers, who invest in their own skills through practice and training.  They get good at a certain type of activity and keep wanting to invest in that area.  If evidence comes to light that that activity is not particularly helpful in their chosen line of work, however, they find it difficult to believe.

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