4 Common Decision-Making Mistakes That Are Holding You Back
From a cognitive science perspective, most decision-making errors boil down to logical fallacies (over-generalizations, comparing apples and oranges, circular thinking), limiting beliefs (underestimations of what’s possible), and judgment biases (valuing certain factors above others). Here are some of the most common mistakes people make when they’re thinking through decisions:
Confirmation Bias
If you already have an opinion about something before you’ve even tried to figure it out, chances are you’ll over-value information that confirms that opinion.
For example, if you think your partner is cheating, you may put a lot of weight on small pieces of “evidence,” like them coming home late from work. To combat this tendency, you might ask yourself, “What evidence do I have that my partner’s not cheating?”
The best way to deal with this is to be aware of the confirmation trap and think about what kinds of information you would expect to find to support alternative outcomes.
The Sunk Cost Fallacy
Sunk costs are money, time, or effort we’ve already spent and can’t get back. The sunk cost fallacy is when we make decisions in order to make our sunk costs feel worth it.
The rational thing to do in that situation would be to leave once you’re not enjoying yourself anymore. That way, you may have wasted $15, but at least you didn’t also waste two hours.
Attribution Bias
Attribution bias is when we excuse our own mistakes but blame other people for theirs. To combat this bias, we should give other people the chance to explain themselves before judging their behavior.
Anchoring Bias
When we’re evaluating an option, we often fixate on the first piece of information we have about it. For example, if we’re bargaining with a salesperson, we might suggest a price only slightly lower than the one they suggest because our mind has anchored onto it as a starting point.
This is where doing your research comes in. When you go to buy something or hire someone, for example, decide in advance around how much you’d be willing to spend.