Decision-Making Errors and Biases

Decision-Making Errors and Biases

• Heuristics: Using simple rules of thumb to simplify decision-making.
• Overconfidence Bias: Having overly positive views of oneself and one's abilities, holding unrealistically positive views of oneself and one's performance.
• Immediate Gratification Bias: Choosing options offering immediate rewards over those with delayed but potentially greater rewards, choosing alternatives that offer immediate rewards and that to avoid immediate costs.
• Anchoring Effect: Focusing too heavily on initial information, ignoring later information, fixating on initial information and ignoring subsequent information.
• Selective Perception Bias: Interpreting events based on pre-existing biases, selecting organizing and interpreting events based on the decision maker’s biased perceptions.
• Confirmation Bias: Seeking information supporting existing beliefs and ignoring contradictory information, seeking out information that reaffirms past choices and discounting contradictory information.
• Framing Bias: Focusing on specific aspects of a situation while ignoring others, selecting and highlighting certain aspects of a situation while ignoring other aspects.
• Availability Bias: Letting recent events impact decisions, potentially leading to poor objectivity, losing decision making objectivity by focusing on the most recent events.
• Representation Bias: Drawing incorrect analogies and assuming similar situations are identical when they aren't, drawing analogies and seeing identical situations when none exist.
• Randomness Bias: Assigning meaning to random events, creating unfounded meaning out of random events.
• Sunk Cost Error: Continuing with a course of action due to past investments, even if it's not beneficial in the future, forgetting that current actions cannot influence past events and relate only to future consequences.
• Self-Serving Bias: Attributing successes to internal factors and failures to external factors, taking quick credit for successes and blaming outside factors for failures.
• Hindsight Bias: Believing an event was predictable after it has already occurred, mistakenly believing that an event could have been predicted once the actual outcome is known (after-the-fact).