Biases in Reasoning (I)

CGE14411
Lecture 11

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Intended Learning Outcomes
 After the lecture, you should be able to
 Explain some major cognitive biases in
human reasoning
 Beware of ( 謹防 ) these biases in everyday
life

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Cognitive Bias
 A cognitive bias refers to a thinking
habit that deviates from rational
thinking styles, leading to errors in
reasoning

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 Lecture 11 & 12 Lecture 9 & 10

Cognitive biases Fallacies

Thinking habits Argument

If you think irrationally, your arguments will be fallacious

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In this lecture
 Survivorship bias (1)
 Swimmer’s body
illusion (2)
 Sunk cost fallacy (5)
 Confirmation bias (7&8)
 Contrast effect (10)
 Availability bias (11)
 Gamblers’ fallacy (29)
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#1 Survivorship Bias
 Survivorship bias is the logical error of
attending to those cases that "survived" some
process and unintentionally overlooking those
that did not because of they are not easily seen

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 Cockpit
• During World war II, planes
were sent to enemy countries.
Ten planes went, only 3
returned.
• Military found holes in the
wings, the tail and center of
the body.
• The wanted to invest to
strengthen these parts.
• However, a mathematician
argued that actually these
parts were strongest. The
cockpit, where no holes were
found, was the weakest.

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 “I have smoked for eighties year, and I’m
still alive. Smoking is not that bad.”
Don’t be misled. Many smokers who died
early just could not tell you their sad
cases.

“I became a writer at 17 year’s old. My books

sell well.
Don’t over-estimate the chance of success.
Behind every popular author, there are 100
other writers whose books never sell. Behind
them, there are another 100 who could not
find publishers.
“One study found that drinking red wine
makes people live longer.”

Be skeptical. When many scientists conduct

studies on a topic, it is likely that one or two
studies report positive findings. These reports
then catch people’s attention. The hundreds
which found “no effect” are not read and
reported. 8
 We tend to only consider information that’s
presented to us and ignore absent information
that may be extremely relevant.
 But focusing on one side of a phenomenon
while neglecting the other distorts our thinking
and decision making process.

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 Without knowing the failure stories, people
systematically overestimate their chances of
success
 To guard against this, find out more on your
own about the once-promising projects which
finally failed.

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#2 Swimmer’s Body Illusion
 The swimmer’s body illusion occurs when we
confuse selection factors with results
 We mistakenly believe that some good results
were due to an experience, but the reality is
that people with good results were selected for
the experience

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 I’ll start swimming
tomorrow. After three
months, I will become as fit
as Phelps.

Michael Fred Phelps II

(born June 30, 1985) is an
American competition
swimmer who won a total
of 22 medals in three
Olympiads.

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 You may think
 that person went through the experience
(swimming), so he or she is now so good

 But the reality is

 that person was already so good, therefore
he or she had the chance to go through the
experience (i.e., selected to join the
swimming team)

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 Song Hye Kyo uses Laneige, so her skin is
silky, smooth, soft and shining

The truth is: Song Hye Kyo’s skin is silky,

smooth, soft and shining, so she is chosen
to be the spokesperson of Laneige

Many successful people studied at Harvard. So

Harvard must be a good school.

The truth is: Many smart people chose Harvard.

So as they graduate, they are easier to succeed
in their career.

Those people, after they got an MBA, earned

much more than ordinary people.

The truth is: Those who study an MBA are

usually wealthier and earn more than
ordinary people before they took up their
studies.
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 This illusion is the basis of many advertising
campaigns
 Before you decide to buy something or take up
a venture, look in the mirror – and be honest
about what you see

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#5 Sunk Cost Fallacy
 The term sunk cost refers to any cost
(not just monetary, but also time and
effort) that has been paid already and
cannot be recovered.

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• You ordered a bowl of
herbal soup which cost
$600. It came but did
not taste good.
• You also happened to
have flu that day, and
drinking the soup might
not be appropriate.
• Would you finish
drinking it?
• How about if the dish
just cost $60?
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 “I ordered too many dishes, but I must eat
them all since I have to pay for all of them.
Also, it is a waste of food.”

The truth is: You have to pay anyway. If you

eat more than you need, this leads to cost on
your health.

“I might continue dating this guy though he is

rude and an addict because I’ve already
invested so much energy in him.”

The truth is: the time and emotion you have

invested cannot be recovered. Look into the
future and get another more promising one.

“I have lost so much in this stock. I can’t sell

it now.”

The rational strategy is: The price you

bought a stock plays no role. What counts is
the stock’s future performance.
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 The fallacy prevents us from realizing that the
best choice is to do whatever that promises a
better future, not which drives away the feeling
of loss in the past.
 The thing to remember is this: What is gone is
gone. You can’t get that investment back.
 Only your assessment of the future costs and
benefits counts.

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#7 Confirmation Bias
 A confirmation bias is a type of cognitive bias
that involves favoring information that confirms
previously existing beliefs or biases.
 We filter out any new information that
contradicts our existing views.
 Disconfirming evidence is ignored or denied.

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 If you talk about a person, Confirms her belief
the person will
immediately appear. Clearly remembered

Don’t talk about Ignored or

others in day time treated as When the man really
and don’t talk about exceptions appears, the person will
ghosts at night remember this clearly and
( 日頭唔好講人 ). treat this as an evidence of
her belief.

But there may be many more

occasions that she talks about
the man, and he does not
appear. However, she would
not remember these incidents
clearly. 21
Experiment 1
 There is an underlying rule in the sequence of
number.
 You can suggest the next number in the
sequence to test the rule, and I’ll tell you
whether ‘it fits the rule’ or ‘does not fit the
rule’.

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• If you believe in horoscope ( 流年運程 ),
you pick up those events that fit the
prediction and conclude that it is
accurate
• If a boss believes that a subordinate is
performing poorly, he or she may pay
attention only to those incidents that the
subordinate performed poorly. The
successful incidents are treated as
exceptions.
• A person who thinks the government is
wrong always attends to those incidents
that the government did not do well

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 It is very difficult to avoid confirmation bias
 However, it is important to remember
 To test whether your belief is true or not,
look for disconfirming evidence
 In scientific investigation, you should not just
look for evidence trying to prove the theory is
correct. Instead, you should examine whether
the theory is not true in certain situations

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#10 Contrast Effect
 A contrast effect is the enhancement or
diminishment, relative to normal, of perception
or evaluation as a result of previous exposure
to something of lesser or greater value, but of
the same base characteristics.

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You judgement depends on a comparison standard

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 We judge something to be cheap, beautiful,
or large if we have something expensive,
ugly, or small in front of us.

$59.9
$179.9
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• You order an expensive dish ($600)
because you were recommended even
more luxurious dishes (>$1,000)
• You buy dresses at a high price ($1,600)
just because they were down from
extremely high price ($4500)
• A charming lady marries a fairly average
man because her parents were awful
people and the ordinary man appears to
be a prince
• You find your present boyfriend or
girlfriend not good enough because you
saw even more attractive boys or girls

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 When you make a decision, think about the
comparison standards you are using
 In particular,
 When you are about to buy something, consider whether
you were shown a more expensive thing deliberately by
people who use it for the contrast effect
 When you are evaluating your boy/girl friend, consider
whether you are using an unrealistic person as a
standard for comparison

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#11 Availability Bias
 The availability heuristic is a mental shortcut
that relies on immediate examples that come
to a your mind when evaluating a specific
topic, concept, method or decision.
 If a random word is taken from an English text,
is it more likely that the word starts with a K,
or that K is the third letter?

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 When an example comes to your mind
easily, you would tend to think that such
kind of cases happen frequently

Travel by plane is Winning mark six is

unsafe! not difficult!
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 It also occurs when a person relies upon
knowledge that is readily available rather than
examine other alternatives or procedures to
make a decision

Look for good eateries? If you want to take Vitamin C,

Use Open Rice buy Ca-C 1000!
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 Beware of availability bias:
 Look for facts and actual statistics, rather
than coming to conclusions based on gut!
 Search for more alternatives – there may be
more solutions than what you know

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#29 Gambler’s Fallacy
 In 1913, the ball landed on
black 20 times in a row of
a roulette wheel
 What color would be hit in
the next round?
 Most people would bet on
red.

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 The Gambler's Fallacy is
committed when a
person assumes that a
departure from what
occurs on average or in
the long term will be
corrected by a balancing
force in the universe in
the short term.

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 The gambler's fallacy (the Monte Carlo
fallacy) is the mistaken belief that
 if something happens more frequently than
normal during some period, it will happen
less frequently in the future, or
 if something happens less frequently than
normal during some period, it will happen
more frequently in the future
 presumably as a means of balancing nature

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 The Fallacy is due to a failure to understand
statistical independence, that is, two events
are statistically independent when the
occurrence of one has no statistical effect upon
the occurrence of the other

“Lightening rarely
strikes twice”

It rarely strikes twice

because it rarely strikes
once
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 All families of six children in a city were
surveyed. Which of the following
patterns of sex order is more possible?
(B: boy, G: girl)
A. B B B G G G
B. G B B G B G

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  How likely is that
the numbers will
repeat itself in the
next draw?
 Many people think

 But this is a fallacy. Each draw is independent.

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Conclusion
 Naming the biases is the
first step to sensitize you
to the biases
 Check out the facts from
credible sources and
don’t just rely on your
impression
 Get a friend to challenge
your view, and be open
to this

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