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Chapter 2 of 8

Information Processing and Judgment

A large family of biases arises from how the mind handles incoming information. Confirmation bias leads people to search for, interpret, and recall evidence that supports existing beliefs, with the simplest counter being to actively seek disconfirming evidence and ask "what would change my mind?" Anchoring bias describes over-reliance on the first piece of information encountered, famously demonstrated in Tversky and Kahneman's wheel-of-fortune experiment, in which an arbitrary number influenced subsequent estimates of African UN representation. Anchoring is so robust that it applies in negotiation, where the first offer typically anchors the final deal in the proposer's favor.

Two closely related heuristics dominate probability judgments. The availability heuristic estimates likelihood by how easily examples come to mind, which makes vivid but rare events such as shark attacks feel more common than they are. The representativeness heuristic judges probability by similarity to a stereotype and famously produces the conjunction fallacy: in the Linda problem, subjects rated "Linda is a feminist bank teller" as more probable than "Linda is a bank teller," violating basic probability because the conjunction cannot be more probable than either constituent. Both heuristics share a common flaw, base rate neglect, in which overall frequencies are ignored in favor of specific case features, producing systematic Bayesian failures in domains from medical diagnosis to eyewitness accounts.

The framing effect shows that the same outcome described as a gain or a loss elicits different choices, illustrated by Tversky and Kahneman's "Asian disease" experiment. Hindsight bias, the "I knew it all along" phenomenon, makes past outcomes feel more predictable than they were and distorts memory of prior uncertainty; it can be countered by writing predictions and reasoning before outcomes occur. The halo and horn effects extend judgment from one salient trait to unrelated attributes, while the spotlight effect and illusion of transparency reveal how people systematically overestimate how much others notice them or read their internal states.

All chapters
  1. 1Foundations: What Cognitive Biases Are
  2. 2Information Processing and Judgment
  3. 3Probability, Statistics, and Pattern Recognition
  4. 4Self, Identity, and Ownership Biases
  5. 5Social Influence and Group Dynamics
  6. 6Decision-Making Errors in Choices and Outcomes
  7. 7Memory, Recall, and Temporal Biases
  8. 8Debiasing Strategies and Practical Tools

Drill it

Reading is not remembering. These come from the Cognitive Biases Quick Reference For Decision Making deck:

Q

Confirmation bias?

Tendency to search for, interpret, and remember information that confirms our prior beliefs. Counter: deliberately seek disconfirming evidence.

Q

Anchoring bias?

Over-relying on the first piece of information (the 'anchor'). Counter: generate your own estimate before seeing the anchor.

Q

Availability heuristic?

Judging probability by how easily examples come to mind. Counter: ask 'what's the actual base rate?'

Q

Sunk cost fallacy?

Continuing because of past investment, not future expected value. Counter: ask 'If I were starting fresh today, would I do this?'