Attribution bias examples Situation – You're driving along the motorway and another car cuts in front of you in an erratic, haphazard way. Biased interpretation – You might draw some conclusions about the other driver's character based on their poor driving. Perhaps you think they're rude, arrogant, or aggressive.
confirmation bias, the tendency to process information by looking for, or interpreting, information that is consistent with one's existing beliefs. This biased approach to decision making is largely unintentional and often results in ignoring inconsistent information.
Examples of the hindsight bias include a person believing they predicted who would win an election or sporting event. Students might assume that they could predict the questions and answers on exams, which can affect how much effort they devote to studying.
An affirmative bias indicates the leaders have a growth mind-set. They believe their employees can learn from mistakes, grow their capabilities, and develop their strengths to become high performers. Unfortunately, most people don't know how to function in an optimal fashion.
Affinity bias, also known as similarity bias, is the tendency people have to connect with others who share similar interests, experiences and backgrounds. When companies hire for “culture fit,” they are likely falling prey to affinity bias.
Recency bias is a psychological phenomenon where we give more importance to recent events compared to what happened a while back.
Hindsight bias. the tendency to believe, after learning an outcome, that one would have foreseen it. (Also known as the I-knew-it-all along phenomenon.) Critical thinking. thinking that does not blindly accept arguments and conclusions.
Hindsight bias is a psychological phenomenon in which one becomes convinced they accurately predicted an event before it occurred. It causes overconfidence in one's ability to predict other future events and may lead to unnecessary risks.
This model emphasizes unique interconnections between inputs and consequences with regard to three levels of hindsight bias: memory distortion (“I said it would happen”), inevitability (“It had to happen”), and foreseeability (“I knew it would happen”). Recollection.
Three types of bias can be distinguished: information bias, selection bias, and confounding. These three types of bias and their potential solutions are discussed using various examples.
Unconscious biases are social stereotypes about certain groups of people that individuals form outside their own conscious awareness. Everyone holds unconscious beliefs about various social and identity groups, and these biases stem from one's tendency to organize social worlds by categorizing.
Confirmation bias is the tendency to seek out, interpret, judge and remember information so that it supports one's pre-existing views and ideas. Confirmation bias can make people less likely to engage with information which challenges their views.
Among them, decision risk, opportunity cost information, and information acquisition have been found to have negative relationships with escalation of commitment. Decision uncertainty, positive performance trend information, and expressed preference for initial decision have been found to have positive relationships.
Early use. Escalation of commitment was first described by Barry M. Staw in his 1976 paper, "Knee deep in the big muddy: A study of escalating commitment to a chosen course of action". Researchers, inspired by the work of Staw, conducted studies that tested factors, situations and causes of escalation of commitment.
The determinant that affects escalation of commitment is institutional inertia. This phenomenon is used to describe how individual attitudes and behavior changes frequently, so therefore, a group's stature is also unpredictable and controllable.
Escalation of commitment can many times cause behavior change by means of locking into resources . One of the first examples of escalation of commitment was described by George Ball, who wrote to President Lyndon Johnson to explain to him the predictions of the war outcome: The decision you face now is crucial.
This can include cognitive factors, personality, and emotions as they relate to project elements. Of these, sunk costs, time investment, decision maker experience and expertise, self-efficacy and confidence, personal responsibility for the initial decision, ego threat, and proximity to project completion have been found to have positive relationships with escalation of commitment, while anticipated regret and positive information framing have been found to have negative relationships.
The attribution theory, originating from Fritz Heider, "attempts to find causal explanations for events and human behaviors." This theory approaches two methods of inquiry including locus of causality and stability. Locus of causality reflects on internal characteristics of an individual, such as intelligence levels and attention seeking, with the relationship of the external space such as weather forecasts and task difficulty. Aspects of control become a significant factor in how a manager justifies a decision made. Managers will use the relationship between internal and external factors to describe why they made a decision to a single point of view. Managers may justify their actions by explaining that this was out of their personal control of the event, or they could believe that the decision could not be controlled by anyone else. Research suggests that "the type of attribution made by an employee across these dimensions is likely to impact an employee's tendency to engage in the negative emotional activity referred to as escalation of commitment."
Prospect theory helps to describe the natural reactions and processes involved in making a decision in a risk-taking situation. Prospect theory makes the argument for how levels of wealth, whether that is people, money, or time, affect how a decision is made. Researchers were particularly interested in how one perceives a situation based on costs and benefits. The framing to how the problem is introduced is crucial for understanding and thinking of the probability that the situation will either work in favor or against you and how to prepare for those changes. "Whyte (1986) argued that prospect theory provides the psychological mechanism by which to explain escalating commitment to a failing course of action without the need to invoke self-justification processes. (Fiegenbaum & Thomas, 1988: 99)" Prospect theorists believe that one's use of this process is when there is a negative downfall in the stakes that will affect the outcome of the project. To ensure they will not fail, the individual may add more resources to assure them that they will succeed. Although this theory seems realistic, researchers "Davis and Bobko (1986) found no effect of personal responsibility on continued commitment to the previous course of action in the positive frame condition." Which means that escalation of commitment will be lower in the higher responsibility situation.
This poor reconstruction was theorized by Fischhoff to be because the participant was "anchored in the hindsightful state of mind created by receipt of knowledge".
Economists Camerer, Loewenstein, and Weber first applied the curse of knowledge phenomenon to economics, in order to explain why and how the assumption that better-informed agents can accurately anticipate the judgments of lesser-informed agents is not inherently true.
By making better-informed agents think that their knowledge is shared by others, the curse helps alleviate the inefficiencies that result from information asymmetries (a better informed party having an advantage in a bargaining situation), bringing outcomes closer to complete information.
A 1990 experiment by a Stanford University graduate student, Elizabeth Newton, illustrated the curse of knowledge in the results of a simple task. A group of subjects were asked to "tap" out well known songs with their fingers, while another group tried to name the melodies. When the "tappers" were asked to predict how many of the "tapped" songs would be recognized by listeners, they would always overestimate. The curse of knowledge is demonstrated here as the "tappers" are so familiar with what they were tapping that they assumed listeners would easily recognize the tune.
If they suffer from the curse of knowledge, high-quality goods will be overpriced and low-quality goods underpriced relative to optimal, profit-maximizing prices; prices will reflect characteristics (e.g., quality) that are unobservable to uninformed buyers (" you get what you pay for ").
The curse of knowledge is a cognitive bias that occurs when an individual, communicating with other individuals, unknowingly assumes that the others have the background to understand. This bias is also called by some authors the curse of expertise.
The curse of expertise may be counterproductive for learners acquiring new skills.
Escalation of commitment can be minimized by ensuring that an outside perspective is always present.
A prevailing theory about escalation of commitment points to our desire to be judged positively by others as a possible cause for this phenomenon. We don't want to admit that we made a poor decision, wasted our time or otherwise seem incompetent and incapable.
A classic example of escalation of commitment involves staying in a job we despise. To an outsider, the situation may seem painfully obvious: quit your job and find a more rewarding career. But when we're in this particular situation, we experience a commitment bias.
Escalation of commitment occurs because we don't always think rationally. We're driven by emotion and ego far more often than we care to admit. Being aware of the prevalence of escalation of commitment can help to curtail it in your business.