Section 1.1: Confirmation Bias

Confirmation bias manifests when individuals seek or interpret information that supports their existing beliefs while ignoring contradictory evidence. For instance, consider John, who has had negative experiences with strangers. He firmly believes that befriending strangers is bad luck. Consequently, he develops a confirmation bias by avoiding interactions with them and only acknowledging experiences that reinforce his belief, disregarding any positive encounters. This bias reinforces his conviction that connections with strangers are perilous.

Section 1.2: Anchoring Bias

Anchoring bias occurs when individuals give disproportionate weight to the first piece of information they receive (the "anchor") during decision-making, even if that information is not relevant. For example, if a musician consults a friend who enthusiastically endorses a particular piece for a performance, they may focus solely on that piece, allowing it to influence their future choices. This reliance on initial impressions can shape future decisions significantly.

Cognitive Biases in Decision Making

This video delves into the various cognitive biases we encounter in decision-making scenarios.

Section 2.1: Availability Heuristic

The availability heuristic refers to our tendency to rely on readily available information when making decisions, often leading to an exaggerated perception of events' likelihood or significance. For instance, when choosing between two travel destinations, one may favor the option recently highlighted in an article, overlooking the equally appealing alternative.

Section 2.2: Halo Effect

The halo effect occurs when a person's overall impression influences specific judgments about them. For example, meeting someone who appears confident and well-dressed may lead to the assumption that they are also intelligent and trustworthy, despite lacking evidence for such traits.

Section 2.3: Overconfidence Bias

Overconfidence bias involves an inflated sense of one's abilities or judgments. For example, an applicant may feel overly confident in their qualifications during a job interview, underestimating the competition and neglecting areas for improvement.

Section 2.4: Sunk Cost Fallacy

This fallacy arises when individuals continue a course of action based on prior investments of time, money, or effort, even when it no longer aligns with their goals. For instance, a business owner may persist with a failing project solely because of the resources already invested.

Section 2.5: Bandwagon Effect

The bandwagon effect describes the tendency to adopt beliefs or behaviors simply because others are doing so. This phenomenon often compels individuals to join trends or challenges even when it may not align with their personal preferences, driven by a fear of missing out.

Section 2.6: Loss Aversion

Loss aversion is the principle that individuals prefer to avoid losses rather than acquire equivalent gains. For example, a person might hold onto a declining stock to prevent realizing a loss, even when it might be more beneficial to sell.

Section 2.7: Framing Effect

The framing effect occurs when choices are influenced by how information is presented. For instance, two medical treatment options can yield different perceptions based solely on whether the success rate or failure rate is emphasized.