What are cognitive biases?
Subconscious errors in thinking that arise from our brain’s attempts to simplify the complex world we live in.
- Not putting money into a retirement fund when you are 30 years old even though you can afford to is an example of “present bias”—the overvaluing of the present because of short-term benefit at the expense of larger benefits in the long term. Because after all, some money now feels better than a lot of money later.
- Many social media platforms suggest content based on news or opinion pieces a person has looked at before. This can lead to “confirmation bias”—using new information to confirm opinions or beliefs.
- Sports fans or pundits often question the decisions of the losing coaches or players once they know the outcome of a game. This is an example of “hindsight bias”—the perception that past events are more predictable than they were.