Cognitive biases

A cognitive bias refers to the systematic pattern of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion. Individuals create their own "subjective social reality" from their perception of the input. An individual's construction of social reality, not the objective input, may dictate their behaviour in the social world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality.

Some cognitive biases are presumably adaptive. Cognitive biases may lead to more effective actions in a given context. Furthermore, cognitive biases enable faster decisions when timeliness is more valuable than accuracy, as illustrated in heuristics. Other cognitive biases are a "by-product" of human processing limitations, resulting from a lack of appropriate mental mechanisms (bounded rationality), or simply from a limited capacity for information processing.

A continually evolving list of cognitive biases has been identified over the last six decades of research on human judgment and decision-making in cognitive science, social psychology, and behavioral economics. Kahneman and Tversky (1996) argue that cognitive biases have efficient practical implications for areas including clinical judgment, entrepreneurship, finance, and management.

Bias arises from various processes that are sometimes difficult to distinguish. These include

The notion of cognitive biases was introduced by Amos Tversky and Daniel Kahneman in 1972 and grew out of their experience of people's innumeracy, or inability to reason intuitively with the greater orders of magnitude. Tversky, Kahneman and colleagues demonstrated several replicable ways in which human judgments and decisions differ from rational choice theory. Tversky and Kahneman explained human differences in judgement and decision making in terms of heuristics. Heuristics involve mental shortcuts which provide swift estimates about the possibility of uncertain occurrences (Baumeister & Bushman, 2010, p. 141). Heuristics are simple for the brain to compute but sometimes introduce "severe and systematic errors" (Tversky & Kahneman, 1974, p. 1125).

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