g-f(2)37 Cognitive decision biases influence decisions in damaging ways

Extra-condensed knowledge

Decision-making becomes most important in times of crisis

• It also becomes more challenging, too, during periods of stress and most difficult when future outcomes are uncertain. 
• One reason is because cognitive decision biases are likely to appear in highly changeable, high-stress environments, influencing decisions in damaging ways.
• The field of behavioral economics, led by social psychologists Daniel Kahneman and Amos Tversky, has identified a number of cognitive biases that affect decision-making — usually in a negative way. 
• Wikipedia lists 124 decision-oriented biases.
• By understanding our biases, we have a better chance of quieting them and moving toward better choices.

Genioux knowledge fact condensed as an image.

The “genioux facts” Knowledge Big Picture (g-f KBP) chart

Condensed knowledge 

• Decision-making becomes most important in times of crisis.
• It also becomes more challenging, too, during periods of stress and most difficult when future outcomes are uncertain. 
• One reason is because cognitive decision biases are likely to appear in highly changeable, high-stress environments, influencing decisions in damaging ways.
• Wikipedia lists 124 decision-oriented biases. 
• The field of behavioral economics, led by social psychologists Daniel Kahneman and Amos Tversky, has identified a number of cognitive biases that affect decision-making — usually in a negative way. 
• There is no definitive list of such biases. 
• It’s sobering to note all the ways in which human brains distort decision processes; perhaps it’s a wonder that any good decision is ever made.
• Perhaps seeing these pointed out will improve decision processes for all of us — including politicians who make large-scale decisions affecting millions, business leaders who make decisions affecting their organizations and many stakeholders, and those who make decisions for themselves and their families.
• Emotion-driven beliefs and intuition are powerful at guiding people toward less-than-optimal decisions. 
• By understanding our biases, we have a better chance of quieting them and moving toward better choices.
• Framing effect. 
• One of the most powerful influences on any decision is how the issue to be decided is framed. 
• Binary, either/or framing is often suboptimal. 
• The very large and important issue of how to manage the virus in the U.S. is increasingly framed as a “save the economy or lock everything down” question.
• Neglect of probability. 
• Public health and epidemiology are probabilistic fields, as is the individual attempt to evade a microbe. 
• No treatment or intervention can lower the relevant probability to zero or raise it to 100%; one can only lower or raise the probability within limits. 
• Yet many lay people are uncomfortable with probabilistic thinking, and have a strong preference for absolute judgments.
• Political bias. 
• While the coronavirus has no politics, people do — and their politics affect how they interpret information and make decisions. 
• Normalcy bias. 
• Normalcy bias is the belief that things will continue to go as they have gone in the past, which leads to an unwillingness or inability to plan for unforeseen circumstances. 
• Confirmation bias. 
• One of the most common decision biases is confirmation bias, in which we search for and pay more heed to information that supports our own views. It’s a more generalized case of political bias. 
• Hostile attribution bias. 
• When others don’t agree with us in a time of high stress, we tend to attribute hostile intent to them. Assuming hostile intent, of course, only raises everyone’s stress levels. 

Category 1, 2, 3 and 4: 

1. A new, better world for everyone

2. The Big Picture of the Digital Era

3. The Big Picture of Sports

4. Coronavirus and other viruses

[genioux fact extracted from MIT SMR]

Type of validity of the "genioux fact". 

• Inherited from sources + Supported by the knowledge of one or more experts + Based on a research. 

Authors of the genioux fact

Fernando Machuca

References

How to Make Better Decisions About Coronavirus, Thomas H. Davenport, April 08, 2020, MIT Sloan Management Review, MAGAZINE SUMMER 2020 ISSUE.

ABOUT THE AUTHORS

Thomas H. Davenport (@tdav) is the President’s Distinguished Professor of Information Technology and Management at Babson College, as well as a fellow at the MIT Initiative on the Digital Economy and a senior adviser to Deloitte’s Analytics and Cognitive practice.

Extracted from Wikipedia

Thomas Hayes "Tom" Davenport, Jr. is an American academic and author specializing in analytics, business process innovation, knowledge management, and artificial intelligence. He is currently the President’s Distinguished Professor in Information Technology and Management at Babson College, a Fellow of the MIT Initiative on the Digital Economy, Co-founder of the International Institute for Analytics, and a Senior Advisor to Deloitte Analytics.

Davenport has written, coauthored, or edited twenty books, including the first books on analytical competition, business process reengineering and achieving value from enterprise systems, and the best seller, Working Knowledge (with Larry Prusak) (Davenport & Prusak 2000), on knowledge management. He has written more than one hundred articles for such publications as Harvard Business Review, MIT Sloan Management Review, California Management Review, the Financial Times, and many other publications. Davenport has also been a columnist for The Wall Street Journal, CIO, InformationWeek, and Forbes magazines.