Cognitive Traps

A very interesting perspective into our typical thought process.

From “The Ascent of Money” by Niall Ferguson

Availability Bias, which causes us to base decision on information that is more readily available in our memories, rather than the data we really need.

Hindsight bias, which causes us to attach higher probabilities to events after they have happened (ex post) than we did before they happened (ex ante).

The problem of induction, which leads us to formulation general rules on the basis of insufficient information.

The fallacy of conjunction (or disjunction), which means we tend to overestimate the probability that seven event of the 90 percent probability will all occur, while underestimating the probability that at least one of seven events of 10 percent probability will occur.

Confirmation bias, which inclines us to look for confirming evidence of an initial hypothesis, rather than falsifying evidence that would disprove it.

Contamination effects, whereby we allow irrelevant but promxiate information to influence a decision.

The affect heuristic, whereby preconceived value judgements interfere with our assessment of costs and benefits.

Scope neglect, which prevents us from proportionately adjusting what we should be willing to sacrifice to avoid harms of different orders of magnitude.

Overconfidence in calibration, which leads us to underestimate the confidence intervals within which our estimates will be robust (e.g.to conflate the ‘best case’ scenario with the ‘most probable’).

Bystander apathy, which inclines us to abdicate individual responsibility when in a crowd.

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