The human brain processes a significant amount of information daily—approximately 11 billion bits of information per second! So, while you may feel like a multitasking maven as you read this article, mentally add up how many bits of information we process in an hour, and debate what to eat for dinner later, you’ve only scratched the surface of what your brain is doing behind the scenes. 

With so much daily internal processing, sometimes your brain needs a break. It may rely on cognitive biases, which are shortcuts our minds use that make decision-making easier. While they can help us make decisions more quickly, that doesn’t always mean they aid us in making the right ones. 

Enter decision-making biases, a subset of cognitive biases that revolve around the choices we make in risky or uncertain situations. Today we’re discussing what decision-making biases are, as well as some of the common types that play a crucial role in helping us make our (sometimes questionable) life choices. 

What Is a Decision-Making Bias? 

As we mentioned above, the cognitive biases that help us make decisions are aptly named decision-making biases. While they help us make choices more quickly, does that mean they always lead to the right conclusion? 

Definitely not. 

Decision-making biases can be harmless. Take deciding what to eat for dinner, for example. To help you reach a quick and easy conclusion, you might choose one of your favorite go-to options. However, there are times when your brain’s attempt to simplify your choices can lead to less rational decisions: for example, feeling confident enough to make Julia Child’s coq au vin from scratch, even though you normally struggle not to burn grilled cheese sandwiches. 

4 Types of Decision-Making Biases 

Below, we discuss four of the common decision-making biases that help you shape your choices throughout the day. 

#1 Overconfidence Bias 

We’ve all been there. Whether you’re a novice or an expert in a particular skill, you decide you’re up to the task (even if you’re highly unqualified). Let’s take the coq au vin example above. While you may not naturally be the head chef in your kitchen, you might feel like a culinary artist after watching hours of “Top Chef” reruns over the weekend. With an artificially inflated ego, coq au vin suddenly seems like an easy dinner solution. 

That’s the overconfidence bias talking. It can lead you to overestimating your skills in a particular area, whether it be cooking dinner, renovating the bathroom, or assembling your little one’s new state-of-the-art playset. 

#2 Sunk Cost Fallacy 

Picture this: It’s the beginning of January—a new year, a new you. You decide to give your fitness goals a fighting chance by purchasing an annual gym membership. It’s a large sum of money upfront, but you’re dedicated to your fitness journey.  

Fast forward a few months. The passion is gone, and though you dread every time you slide your feet into your tennis shoes, you continue to go to the gym simply because you’ve already paid for the entire year. 

This is an example of the sunk cost fallacy, a decision-making bias that occurs when you continue to invest in a decision or endeavor based on the resources you’ve already committed. Even if cutting your losses is the more rational decision, you’ll keep investing because you’ve committed too much of your time, money, or effort. 

#3 Status Quo Bias 

The status quo bias affects our decisions by making us inclined to stick with our current situation. We often choose to stay the same because we fear change or have grown used to doing things a certain way. For instance, your doctor might suggest a new medication that provides better health benefits than the one you’ve been taking. However, the status quo bias may rear its ugly head, reminding you that you’ve been fine with your current medication for years, so why switch it up now? 

#4 Anchoring 

Have you ever locked eyes with the most expensive item on the menu? It seems stiflingly high at first, but after a few moments, it becomes the anchor item on the menu. Suddenly other plates seem more reasonable, even if they’re still priced higher than usual. 

Welcome to the anchoring bias, which occurs when you find an initial piece of information and rely heavily on it when making subsequent decisions. While your anchor may be irrelevant to your final choice, it exhibits a strong influence on your decision nonetheless. 

Make the Decision That’s Right For You at UTPB 

With The University of Texas Permian Basin’s online Bachelor of Arts in Psychology, your higher education decision is simple. Our program offers online students plenty of benefits: 

  • Flexibility: Complete your coursework wherever you want within a timeframe that works for you. 
  • Affordability: We’re ranked the #2 Most Affordable Online Psychology Degree by STEPS. 
  • Networking: Meet virtually with distinguished professors and other like-minded students from around the country, expanding your network and potential career opportunities. 

Take the first step toward deciding your future and apply today! 

Don’t miss part two of our series on cognitive bias, where we’ll discuss social biases and how they influence the way we behave and perceive ourselves and others. 

Sources: 
https://www.forbes.com/sites/daviddisalvo/2013/06/22/your-brain-sees-even-when-you-dont/?sh=26e4097d116a
https://www.masterclass.com/articles/overconfidence-bias