Bias: Reasons, Types And Effects

Identifying Bias

Andrew Banasiewicz had written in his 2019 published book, Evidence-based Decision-making, it is well known that the human brain has essentially the same basic structure as other mammalian brains; yet, somehow, it gives rise to capabilities that enable humans to do so much more. In addition, although manifestations of those capabilities span the spectrum ranging from tragic to triumphant, the intellectual prowess that emanates from the roughly three pounds of squidgy matter that is the human brain seem limitless (Banasiewicz, 2019).

Human brain is the brilliant organ yet; brilliance is not supremacy. At times when brain is assigned to make quick decisions for certain situations, it utilizes sense making heuristics, or alternate routes, creating what is normally alluded to as instinct. Such instincts can often ends feel exceptionally normal, and extremely 'right', however can at last end up being unjustifiable or biased (Banasiewicz, 2019).

Being biased is somewhat disproportionate: a biased individual favours one side or issue over another. While biased can just mean having an inclination for one thing over another, it additionally is synonymous with 'prejudiced,' and that prejudiced can be taken to the extreme. We all might want to feel that we can settle on target and levelheaded choices constantly. Yet, the truth of the matter is, that in specific situations, nearly anybody can wind up being biased in their reasoning and decision making.

Research in this area has shown that the decision making is very much effected by our human values such as emotion. A genuine case of a bias is when feelings are included. However, this bias that is seen in decision making has been tried to be corrected. Experts and analysts have tried to correct it by using modeling but they have faced the very same problem while trying to correct it because if the input for the modeling is biased then it surely effects the output and all the results based on it. But, their efforts paid off as they found out the causes of the biasness they were facing in their process. They found out that the human mind tended to manipulate the decisions to match their liking which is called cognitive bias. Once in a while are great choices made when we are furious and it's difficult to be reasonable whenever the circumstance includes a friend or family member and this is called a motivational bias. Involvement of a family member or a friend while making decisions can consciously or even sub-consciously effects a humans’ decision.

Cognitive Bias

Cognitive bias as discussed earlier is an efficient inconsistency between the 'right' answer in a judgmental errand, given by a formal regulating rule, and the decision maker's or expert’s genuine response to such an undertaking (Montibeller & Winterfeldt, 2015). Cognitive biases are often a consequence of human mind’s endeavor to simplify information processing. It usually shows itself in generally able people coming to truthfully unwarranted or logically irrational conclusions as a result of elements, for example, peer impact, the attractive quality of alternatives under consideration, individual motivations, emotions, fancy affiliations and limits on mind’s ability to process information (Banasiewicz, 2019).

Cognitive bias can be brought about by various things, but it is these mental short-cuts or easy routes, known as heuristics, that frequently plays a major contributing role. While they can frequently be surprisingly accurate, they can also lead to errors in thinking. For example: a person is walking down a dark alley and notices a dark shadow following him all the way, a cognitive bias may make the person to assume that the shadow following him is a mugger and he needs to get away from the alley as fast as possible. But the shadow might just be of a flag moving due to the wind rather than a mugger following him (Cherry, 2019).

Cognitive bias is a deliberate mistake in imagining that influences the choices and decisions that individuals make. A portion of these biases are identified with memory. The manner in which a person recollects an occasion might be biased for various reasons and that thus can lead to biased thinking and decision making. Other cognitive biases may be identified with issues with attention. Since attention is a limited asset, individuals must be particular about what they focus on in their general surroundings. Because of this, unpretentious biases can sneak in and impact the manner in which a person sees and considers the world (Cherry, 2019). Cognitive Biases:

• Anchoring –tendency to overweight the first information received.
• Confirmation Bias–placing more emphasis on information that supports currently held views.
• Framing–tendency to respond based on how information is presented.
• Hindsight Bias–tendency to see things as more predictable than they really are.
• Status Quo Bias–inclination to prefer the current state of affairs.
• Sunk-cost Bias–tendency to continue with a course of action in an attempt to recoup losses, despite rationale to do otherwise.

Das and Teng have classified cognitive bias in the Journal of Management Studies published in 1999 into four categories which are 1. Prior hypothesis and focusing on limited targets 2. Exposure to limited alternatives 3. Insensitivity to outcome probabilities 4. Illusion of manageability.

Different authors have given different explanations regarding the types of cognitive biases. However, the information below comprises of the common definitions proposed by them.

a. Confirmation Bias

Researches have demonstrated that decision makers are probably going to bring their formerly framed beliefs or theories into basic decision making circumstances (Das & Teng, 1999). For example: a firm has to hire a company from a list of companies which manufacture bathroom tiles. Among the list of the companies, there is such a company (Say ‘X’) which used to manufacture tiles that were very poor in quality but at present, X has set their standards high and are manufacturing the tiles with best quality. But, the decision maker beliefs that X does not provide qualitative good and selects some other company which is not as good as X.

At the same time, managers or the decision makers have been found to focus on selected targets, rather than on broad objectives. Their attention centers around those key objectives that intrigue to their interests, and accordingly they tend to ignore information about other beneficial objectives. Summing up, bringing earlier theories and hypothesis to decision making and attention regarding chosen targets together results in a biased view of the environment and the current issue. (Das & Teng, 1999).

So, some of the techniques that can be used to overcome this bias is to set up meetings among the decision makers to keep the information they get up to date. A research team can be brought to existence to support them with the latest information they might need in the decision making process. Key decision makers should be given trainings to broaden their mind so that they don’t just stick with the factors that are in their interests.

b. Anchoring bias

Decision makers lean themselves to a single set of information that can accomplish an objective while simultaneously ignoring other options and use instinct to enhance rational analysis. Subsequently, instead of attempting to indicate every pertinent worth and objectives and produce various elective approaches, decision makers focus on the anchoring information that results in them making inadequate choices. For example: a person goes to buy a car and sets his mind to buy one by just looking at the car’s exterior and completely ignoring internal features. Here, the person going to buy the car overlooks the interior because he is anchored to the external looks of the machine.

Debiasing this type of bias can be prevented by getting advices from different specialists who uses varying anchors to make a decision as this can include wide range of information in better detail. Another much simpler process of debiasing would be to explain the neglected information to the decision maker. Lastly, trainings can be conducted to make them aware about this type of bias that can limit their ability to make the best decision.

c. Insensitivity to Outcome Probabilities

Research has demonstrated that decision makers do not trust, do not comprehend and usually don't utilize estimates of result probabilities. Decision makers will in general be impacted more by the value of potential results than by the size of the probabilities. Managers are bound to utilize a couple of key qualities to portray a circumstance, instead of registering or utilizing standard statistics dependent on probabilities. Another reason decision maker’s do not utilize estimates of probabilities is that they consider problems to be one unique. Along these lines, probability assessments and statistics from similar occasions in the past become irrelevant. Likewise, decision makers are additionally described by their lack of care toward the legitimacy of estimates (Das & Teng, 1999).

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This can be avoided by explaining to the decision makers, why is it important to consider statistics and probabilities rather than just focusing on outcomes.

d. Over confidence bias

Over confidence bias is a type of cognitive bias that expresses itself in two different ways. First, decision makers may improperly see a triumph probability higher than the objective probability would warrant, and afterward have a vision of control. For this situation, in spite of the fact that they are worried about result probabilities, they will in general structure excessively hopeful evaluations. In a contrasting way, decision makers will in general overestimate the degree to which a result under their control, accepting that risk can be decreased by utilizing their expert aptitudes. Second, decision makers have the deception that results of decision are convenient. They falsely expect that should issues emerge they would probably fix them. Decision makers tend to accept that consequences can be contained, rectified or turned around, given some additional endeavors. Decision makers believe in 'post-decisional control', which permits them 'to impact whatever goes on after the moment of choice'. The fantasy of sensibility of terrible results facilitates decision makers' anxiety over such results (Das & Teng, 1999).

We can overcome this type of bias by conducting different trainings on the importance of the details that they are omitting in the verge of making these overly confident decisions. Also, it can be omitted by having a clear idea on the best and worst case scenarios about certain decisions before diving into the suitable decision that lies somewhere in the middle.

Thus, cognitive bias is based on the thought processing error frequently arising from glitches with reminiscence, attention, attribution and other mental slipups.

Motivational Bias

Motivational biases are those in which decisions are affected by the desirability or undesirability of occasions, results, consequences, outcomes or choices (Montibeller & Winterfeldt, 2015)

Types of motivational bias

Affect influenced

This type of bias occurs when there is a passionate inclination in support or against a particular result or choices that taints the judgement. For example: If there is a project manager who has to decide the winner of a bidding for the contract of a construction project and he has a friend who has also lodged a bid for the contract, the manager’s judgement here will be affected by this connection he has with his friend. This may happen consciously or even unconsciously.

This type of bias can usually be corrected by keeping the affected party out of the decision making process so that the outcome is fair and fruitful.

Desirability of a positive event or consequence

This type of motivational bias is caused by overthinking about events or likely outcomes which brings about the obsession about the likeliness of the desired outcome coming true. In case of cost estimation, such bias can affect an engineering project as the obsession of the decision making authority to finish the project in the desired cost can lead to the compromise in the quality.

This can be made right by accepting a realistic view of a projects and its probabilities. It can also be avoided by decomposition or by getting the views of different authorities who have diverse ideas on the decision making.

Undesirability of a negative event or consequence

Undesirability of a negative event or consequence implies that the pessimism brought about by over thinking the worst case scenarios can restrain the decision making abilities of a person. This causes major confusions eventually leading to a regretful outcome.

This bias can be corrected by the same debiasing methods discussed in the preceding topic.

Besides these major biases in decision making there are some minor biases that a decision maker may face. But they are easy to correct or manage. Few are described below:

Base rate fallacy

Base rate fallacy occurs when people tend to assume certain outcome may occur without being concerned about the knowledge regarding the outcome. People start to focus on irrelevant information although it is not sure if the desired outcome will come into existence. In a project, this bias can be managed by dividing the different section of a project to different teams of experts. This will help bridge the knowledge gap in a decision making process. For example, in a construction project, there are various sections of it like brick works, concrete works, rebar works, etc. So, basically in this project we hire different experts to deal with the base rates of each of the works. This gives the decision makers a knowledge regarding the range of bidding which in-turn simplifies and strengthens the decision making process.

Insensitivity to sample size

This condition occurs when people don’t take into consideration the range of choices they have to decide on. They tend to generalize the range and this effects the decision they make. As indicated by the laws of probability, outrageous midpoints or extents are less likely in enormous ranges than in little ranges. Individuals will general overlook the range and consider limits similarly likely in all ranges.

This bias can simply be addressed by using statistical tools to define the likelihood of boundary line results in different range of data. Also we can use the provided information to explain why the use of statistical tool is different for different range of data as the effectiveness of the tools also differs in respect to the data ranges.

Bibliography

1. Banasiewicz, A. D. (2019). Evidence-Based Decision-Making. New York: Taylor & Francis Group.
2. Cherry, K. (2019, July 29). Very Well Mind. Retrieved August 05, 2019, from How Cognitive Biases Influence How You Think and Act: https://www.verywellmind.com/what-is-a-cognitive-bias-2794963
3. Das, T. K., & Teng, B.-S. (1999). Journal of Management Studies. Cognitive Bias and Strategic Decision Process: An Integratedd Prespective, 762-763.
4. Hersing, W. S. (2017). Journal of Space Engineering. Managing cognitive bias in safety decision making: Application of emotional intelligence competencies, 124-128.
5. Montibeller, G., & Winterfeldt, D. v. (2015). Cognitive and Motivational Biases in Decision and Risk Analysis, 35, 1231. doi:0.1111/risa.12360