Description We let earlier acquired pieces of information influence our decision making in the present. Despite that this info is not necessarily relevant. This especially occurs when prices or estimates are involved.
Example When you negotiate over prices it is advisable to ignore the opening bid. Before you place a counter-offer you should ask the other party to provide a more realistic offer. This way you can prevent the deal closing near the ridiculous opening bid.
Description We overestimate the accuracy and truthfulness of a person we see as an authority. This is independent of the rational judgement of the message one could have. Or could possibly even have nothing to do with the expertise of that person.
Example We are more likely to accept a recommendation from a veteran consultant. Even if the recommendation is about buying a house, whereas the expertise is in mergers and acquisition.
Description We reinforce our beliefs when confronted with conflicting evidence about those beliefs.
Example During a birthday party cousing Fred claims that the neighbourhood is in decline. When you show him declining crime rates he gives you a stern look. You are clearly misinterpreting the data. This is only proof of researchers not doing their jobs well. Which is criminal enough as it is in his opinion.
Description We misinterpret imagined memories for actual ones. This unconsciously causes us to share bloated and inaccurate memories.
Example You theatrically share your memory of an excessively drunk Jack during the company party of 2009. Nobody else remembers, but you are so convincing that nobody argues against it.
Description We favor the search for, finding and processing of information that support our dominant beliefs and worldview.
Example You believe that women are intellectually superior over men. And you grow conscious of it when you meet a smart woman. However, you fail to notice the intelligence of a similarly intelligent man you meet.
Description When choosing between two products (for example of different sizes) you tend to favor one more when an option is added that is asymmetrically closer to one of the earlier products.
Example In the movie theatre three sizes of popcorn-baskets are sold: small, medium and large. They cost €2.50, €3,50 en €4,00 respectively. People choose the larger basket more often than the smaller one compared to the situation when only small and large are for sale.
Description We underestimate the effect of basic bodily states (like hunger, exhaustion, stress; so-called 'hot state') on our decision making. Hot states impede on our rational decision making. This simultaneously troubles our understanding of people who are in 'cold (rational) states'. This goes the other way around as well.
Example Court judges more often reject appeals for parole just before lunch. They unconsciously show little sympahty to the prisoner whose case is serving at 11:30. Because the judge confuses the gnawing feeling in his stomach to be a bad hunch about this appeal instead of the appeal for food that it actually is.
Description We expect that someone who recently had a successful outcome has larger chances of success in the future as well. Even though there is no statistical basis to it.
Example A basketball player has a free-throw average of 50%, But tonight he has hit target three times in a row. So you place a quick bet on the fourth and fifth throw to hit the net as well. Even though the odds are against you at the bookies.
Illusion of validity
Description We overestimate our ability to correctly interpret data and make predictions based on the data. Especially when we look at data that seem to show 'consistent' patterns that are clearly telling us a story.
Example The dataset indicates that hamburger sales are stimulated by the color of the little poster at the counter. While actually it has nothing to do with it, but it clearly makes sense (to a marketing expert).
Description We are quick to spot correlations between attributes, variables and phenomena that are absent in reality. We see this even more when looking at datasets.
Example You have studied the moon phases for years as an amateur astrologer. You conclude that there is a direct relationship between lunar phase and rising or declining birth rates in the city of Amsterdam.
Description We have a tendency to weigh (potential) loss more heavily that (potential) gain in making win/lose decisions.
Example You are given a choice to make a wager with €10 of out-of-pocket money. Chances of winning are 50%. If you win you get €20, and if you lose you get nothing. Even though net-worth is zero, you strongly feel that you would rather not place this bet.
Description Negative stimuli have a disproportionally larger effect on our state of mind than positive stimuli of a comparable intensity.
Example You are sitting in on a meeting with the board of directors. And you realize that 90% of the time has been spend on risks, losses and threaths and how to avoid all of these.
Description We experience unpleasant fealings and aversion towards people who reduce our freedom of choice and autonomy. Especially if we see these people as authority figures. This inspires us to show rebelious behavior.
Example In a public toilet building a sign says: "It is not allowed to write on the walls." The walls are filled with tags and obscenities. In another toilet building without such a sign one finds just one subtle declaration of love in a corner on the wall.
Description We have a tendency to connect phenomena that resemble one another; that are representative for each other. Even if there is no correlation or causality between them.
Example In certain alternative medical practices it is advised to eat organ meats that resemble the organ a patient is suffering from. The healthy consumed meat is supposed to help heal the sick tissue.
Description We bend our perception to retain our self-image. Or to present ourselves to the world in an overly positive manner.
Example Manager Philip thinks highly of himself regarding empathy, diplomacy and people skills in general. If you ask his employees how they would describe Philip you get the impression he is quite full of himself and stuck up.
Description Sometimes we think that we're seen and heard more intently by others than is actually the case.
Example During a presentation you're anxious about a few sweat drops on your forehead. You expect that everybody will see and have an opinion about you. In reality almost nobody takes any notice. Moreover, nobody has an opinion about it.