Common Biases and errors in decision making

1. Overconfidence bias
- Believing too much in our own ability to make good decisions – especially when outside of
own expertise
Ex: Linh Tran, 22 years old, graduated with honors in Marketing from a university in Ho Chi Minh
City. HCM.

Because she has interned since school and lived in many clubs, Linh Tran boldly applied for
the position of Digital Marketer of a large advertising agency.

But, just a few weeks, Linh realized he was very inexperienced. She did not anticipate
possible situations such as changing budgets, reaching the wrong customer file, not knowing
how to measure and optimize advertising,...

Because of her subjective knowledge, it took a while for Linh to learn what she thought she
knew

2. Anchoring bias
- Using early, first received information as the basis for making subsequent judgments

Ex: Imagine you're selling your house. The first one is $50,000 less than you'd expect. Influenced
by the anchor effect, you will consider it more closely, taking this offer more seriously because
this is the first to bid. This negotiated price is more likely to change your mind about the value of
your home than any future price.

3. Confirmation bias
- Selecting and using only facts that support our decision

Ex: You believe that left-handed people are more creative than right-handed people. Every time
you meet someone who is both left-handed and creative, you will assume that this is proof that
your point of view is correct and ignore other factors

Ex: Social media, for example, is like a haven of confirmation bias. Think of your uncle Steve,
who supports political candidate A. He just watches the news and shares posts about how great
his candidacy is. This creates a net that blocks all conflicting information about candidate A, and
Uncle Steve never believes in them.

4. Availability bias
- People have a habit of overestimating the importance of a piece of information already in
their memory

Ex: Doctor often rely on the information they remember and available symptoms to diagnose
patients
Ex: Watching the news is an example of this type of bias. Because we have heard so many
stories of violence and disasters, we assume that the world is dangerous. While it's easy to
Google to see that the world is actually safer in many ways today than it was decades ago, the
inbuilt experience bias still influences the way we think.