xconfcogntivebias v0.4
TRANSCRIPT
-
7/30/2019 xconfcogntivebias v0.4
1/32
Cognitive
BiasBy
Fahad NariRam Ramalingam
-
7/30/2019 xconfcogntivebias v0.4
2/32
A game to start of the session
Question 1
Program A: "200 people will be
saved"
Program B: "there is a one-thirdprobability that 600 people willbe saved, and a two-thirdsprobability that no people will besaved"
Question 1
What was your 10th classpercentage
What percentage of Africannations are in the UN
Question 2
Program C: "400 people will die"
Program D: "there is a one-thirdprobability that nobody will die,and a two-third probability that
600 people will die
Question 2
How old are you
What percentage of Africannations are in the UN
1. There is a disease outbreak. And you have a choice as the Govt, of goingahead with 2 programs
2. Just 2 easy questions to answer
-
7/30/2019 xconfcogntivebias v0.4
3/32
Cognition
The term cognition (Latin: cognoscere, "to know) refers to a faculty forthe processing of information, applying knowledge, and changingpreferences (recognize, incognito, cognizant technology solutions )
This applies to processes such as memory, association, conceptformation, language, attention, perception, action, problemsolving and mental imagery
-
7/30/2019 xconfcogntivebias v0.4
4/32
What is Cognitive Bias?
Definition
A cognitive bias is the human tendency to make systematic errors injudgment, knowledge, and reasoning. Such biases can result frominformation-processing shortcuts called heuristics.
They include errors in statistical judgment, social attribution, and memoryerrors.
Cognitive biases are a common outcome of human thought, and oftendrastically skew the reliability of anecdotal and legal evidence.
It is a phenomenon that has been studied extensively in cognitivescience and social psychology.
-
7/30/2019 xconfcogntivebias v0.4
5/32
Pioneers of Cognitive Bias
Amos Tversky& Daniel Kahneman (Nobel Prize for Economics, 2002)
1. Rational Choice -> Optimising2. Innumeracy -> Satisficing3. Prospect Theory -> Behavioural Economics
-
7/30/2019 xconfcogntivebias v0.4
6/32
Causes
1. Bounded Rationality
2. Attribute substitution
3. Dissonance reduction
4. Introspective Illusion
5. Heuristics
6. Adaptive Bias
7. Statistical misrepresentation
-
7/30/2019 xconfcogntivebias v0.4
7/32
Bounded Rationality
1. In decision making, rationality of individuals is limited by theinformation they have, the cognitive limitations of their minds, and thefinite amount of time
2. Decision-maker is a satisficer, not Optimizer
3. Proposed by Herbert Simon as an alternative to Economic modeling;it complements rationality as optimization1. limiting what sorts of utility functions there might be.2. recognizing the costs of gathering and processing information.3. the possibility of having a "vector" or "multi-valued" utility func
4. Example: Anchoring effect; Selective perception
-
7/30/2019 xconfcogntivebias v0.4
8/32
Attribute Substitution
1. When making a judgment that is computationally complex, we tend tosubstitute a more easily calculated heuristic attribute
2. Intuitive substitution rather than self-aware/reflective
3. When does it happen
1. The target attribute is relatively inaccessible2. An associated attribute is highly accessible e.g. priming (game
2)3. The substitution is not detected and corrected by the system
1. A bat and a ball together cost $1.10. The bat costs $1 morethan the ball. How much does the ball cost?
Most people guess the answer as $1.0 for Bat. $0.10 for ball. Did you?
-
7/30/2019 xconfcogntivebias v0.4
9/32
Dissonance Reduction
1. Cognitive dissonance is an uncomfortable feeling caused by holdingconflicting ideas simultaneously
2. People have a motivational drive to reduce dissonance - by justifying,blaming, and denying
3. Aesops fable: Fox and the grapes
4. Ben Franklin effect winning over a political opponent by borrowing arare and curious book
5. Effort justification etc
-
7/30/2019 xconfcogntivebias v0.4
10/32
Causes
1. Bounded Rationality
2. Attribute substitution
3. Dissonance reduction
4. Introspective Illusion thinking you have thought and understood
5. Heuristicsbasing ones experience over other facts
6. Adaptive Bias Cost optimized more than count. Type I and Type II
errors
7. Statistical misrepresentation using correct data for wrongconclusions. E.g. Black swan
-
7/30/2019 xconfcogntivebias v0.4
11/32
Types of Cognitive Bias
1. Decision Making Bias
2. Probability and Belief Bias
3. Social Bias
4. Memory Bias
-
7/30/2019 xconfcogntivebias v0.4
12/32
Decision Making Bias
-
7/30/2019 xconfcogntivebias v0.4
13/32
Anchoring Effect
Basing one's judgment on just one source of information
Caused by Attribute substitution
-
7/30/2019 xconfcogntivebias v0.4
14/32
Anchoring Effect
E.g.1 . Gen example: Amos Tversky and Daniel Kahneman in one of theirfirst studies, the two showed that when asked to guess the percentage ofAfrican nations which are members of the United Nations, people whowere first asked "Was it more or less than 10%? guessed lower values
(25% on average) than those who had been asked if it was more or lessthan 65% (45% on average)
IT World-
Giving just one estimate/cost for projects often backfires because of this
people tend to stick to numbers and dont budge easily
-
7/30/2019 xconfcogntivebias v0.4
15/32
Bandwagon Effect
Groupthink - the tendency to do things because many
other people do the same
Caused by Attribute substitution
-
7/30/2019 xconfcogntivebias v0.4
16/32
Bandwagon Effect
Example1: When everyone started doing ERP/DWH/Agile... Thats
bandwagon effect.
Example 2: When ULIP schemes were launched in India, UTI etc. created
a media storm that had everyone buying and regretting later
IT world:
+ using statistics to convince: Quote Forrester research on Agile efficiency
to convince customer
- Blindly using some tools or techniques from other experience?
-
7/30/2019 xconfcogntivebias v0.4
17/32
Confirmation Bias
Confirmation bias refers to a type of selective thinkingwhereby one
tends to notice and to look for what confirms one's beliefs,
and to ignore, not look for, or undervalue the relevance of what
contradicts one's beliefs caused by heuristics and bounded rationality
-
7/30/2019 xconfcogntivebias v0.4
18/32
Example 1 : Superstition of a black cat crossing your path and something
bad happens to you on the same day
Example 2: Derren Brown Astrology hoaxes
IT examples: ??
Confirmation Bias
-
7/30/2019 xconfcogntivebias v0.4
19/32
Selective Perception
Tendency for expectations to affect perception
Caused by attribute substitution
-
7/30/2019 xconfcogntivebias v0.4
20/32
E.g.1: Not taking inputs from some users. Ignoring some info, because
we prejudice that they usually don't make sense. Listening only to the
loudest speaker etc.
E.g.2.: Ignoring user testing when building a product for a larger
audience
Selective Perception
-
7/30/2019 xconfcogntivebias v0.4
21/32
Probability/Belief Bias
-
7/30/2019 xconfcogntivebias v0.4
22/32
Zero Risk Bias
Preference for reducing a small risk to zero over a greater
reduction in a larger risk
E.g. People not insuring high risk event and investing for high
risk high return
-
7/30/2019 xconfcogntivebias v0.4
23/32
Availability Heuristic
The availability heuristic is a phenomenon in which people predict the
frequency of an event, or a proportion within a population, based on
how easily an example can be brought to mind
E.g. Smoking is perfectly fine as my grand dad lived for 100
years.
-
7/30/2019 xconfcogntivebias v0.4
24/32
Social Bias
Bias that arise during social interactions due asymmetry
in situation or perceptions of personality
-
7/30/2019 xconfcogntivebias v0.4
25/32
Halo Effect
The tendency for a person's positive or negative traits to
"spill over" from one area of their personality to another in
others' perceptions of them
Example : Ipod makes us think all apple products are good.
-
7/30/2019 xconfcogntivebias v0.4
26/32
Illusion of Transparency
Experiment:
Need a volunteer who can do theoccasional table-top drumming
-
7/30/2019 xconfcogntivebias v0.4
27/32
Illusion of Transparency
People overestimate others' ability to know them, and they also
overestimate their ability to know others.
Examples 1: In the domain of public speaking, for example, individuals who
are nervous about delivering a public speech believe their nervousness is
more apparent to their audience than it actually is
-
7/30/2019 xconfcogntivebias v0.4
28/32
Memory Bias
-
7/30/2019 xconfcogntivebias v0.4
29/32
Hindsight Bias
Hindsight bias is the inclination to see events that have occurred asbeing more predictable than they were before they took place. Also
known I-knew-it-all-along-effect
Example1: Someone predicts rains and it happens the next moment and
they claim as if they I-knew-it-all-along-effect
-
7/30/2019 xconfcogntivebias v0.4
30/32
Self Serving Bias
A self-serving bias occurs when people attribute their successes to internal
or personal factors but attribute their failures to situational factors beyond
their control
E.g. 1 : Blaming failure of peace in Kashmir upon Pakistan
E.g. 2 : Devs blame BAs when stories change during development :D
-
7/30/2019 xconfcogntivebias v0.4
31/32
Conclusion
These topics are not comprehensive. They are quite complex, as Fahaddiscovered much to his consternation
The lesson here, is not to start looking for each of this biases in everyactivity we do, but keep in mind.
Understand that a BAs job is not just to trans-literate, but actively findways to account for and overcome the bigger impact biases
-
7/30/2019 xconfcogntivebias v0.4
32/32
Sources
Wikipedia
Images from images.google.com
Istock photos
Getty Images