Taming Heuristics & Biases

FRAMING
gains versus losses 
reference points and wealth effects
Don't automatically accept initial framing
Strive for objective, neutral framing
Would a different frame hange your thinking?
Challenge other people's framings

ANCHORING AND
ADJUSTMENT

"Is population of Mexico >35M or <35M?"
insufficient adjustments 
anchoring of subjective probability distributions
conjunctive & disjunctive events
Use multiple perspectives
Think first, ask questions later
Consult diverse sources 
Don't anchor your advisers 
Be especially wary of anchors in negotiations 

STATUS QUO
 ("Business as Usual")
Sins of omission, sins of commission
Effect of number of alternative 
Maybe status quo really is best
Remind yourself of your objectives 
Look for alternatives
Evaluate status quo as if it weren't 
Don't exaggerate switching costs 
Time changes things 
Avoid the "donkey between 2 bales of hay" trap

SUNK COST ("Throwing good money after bad") Listen to people not involved in original decision 
Know thyself (Socrates)
Reassign responsibility 
Reward good decision making, not lucky results 

CONFIRMATION 
"If A then B; .B; therefore A"
jumping to conclusions
"accept" null hypothesis vs. "fail to reject" 
Examine all evidence with equal rigor
Use a Devil's Advocate 
Know thyself 
Don't ask leading questions 

OVERCONFIDENCE 
illusion of control Triple estimate: optimistic, likely, pessimistic
Truth in labeling

PRUDENCE
 
(The flip side of overconfidence)
"Conservative Estimates"

RECALLABILITY 
("AVAILABILITY ") 
biases due to the retrievability of instances 
biases due to the effectiveness of a search set 
biases of imaginability 
illusory correlation 
concreteness 
Look for objective statistics:
                     Do the numbers!

IGNORING BASE RATE
("REPRESENTATIVENESS") 
insensitivity to prior probability of outcomes 
insensitivity to sample size 
misperceptions of chance 
expectation of local representativeness of sequences 
gambler's fallacy 
"law" of small numbers 
regression ot the mean
conjunction fallacy
Bayes Theorem:
                    Do the math

OUTGUESSING RANDOMNESS 
hindsight biases
insensitivity to predictability 
misconceptions of regression 
the illusion of validity (overconfidence)
Confidence Intervals & Hyothesis Tests:
                   Do the math!

SELECTIVE PERCEPTION 
effect of role or expertise
"editing" of memory 
leveling or flattening; sharpening 
rationalization 
wishful thinking 
 optimism & pessimism are both wishful thinking
Heterogeneous Groups:
The power of diversity