Saturday, September 25, 2010

Understand Your Confirmations Biases: An Idea for Better Decision Making

|"It is the peculiar and perpetual error of the human understanding to be more moved and excited by affirmatives than by negatives." --Francis Bacon

Post written by Anshul Gupta. Follow him on twitter

Wiki defines confirmation biases as: "Confirmation bias (also called confirmatory bias or myside bias) is a tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true." And as a result, people gather evidence and recall information from memory selectively, and interpret it in a biased way. This limits our ability to a make good decisions.

Confirmation bias is a kind of selective thinking whereby one tends to notice and to look for what confirms one's beliefs, and to ignore, not look for, or undervalue the relevance of what contradicts one's beliefs. For example, if you believe that during a full moon there is an increase in admissions to the emergency room where you work, you will take notice of admissions during a full moon, but be inattentive to the moon when admissions occur during other

nights of the month. A tendency to do this over time unjustifiably strengthens your belief in the relationship between the full moon and accidents and other lunar effects.

Experiments have repeatedly found that people tend to test hypotheses in a one-sided way, by searching for evidence consistent with the hypothesis they hold at a given time. 

That is if I believe that some body is not a good person (based on preconceived notions or his first impression on us), we tend to find evidence for this belief. People invest on stocks based on their beliefs and they search for confirmatory evidence to support their decision of investing on those particular stocks.

Confirmation biases are not limited to the collection of evidence. Even if two individuals have the same information, the way they interpret it can be biased.

Even if someone has sought and interpreted evidence in a neutral manner, they may still remember it selectively to reinforce their expectations. This effect is called "selective recall", "confirmatory memory" or "access-biased memory"

Its effects are:

  • Polarization of opinion
  • Persistence of discredited beliefs
  • Preference for early information
  • Illusory association between events

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