Recallability
The recallability decision-making trap prompts us to give undue weight to recent dramatic events. Illustration: We were at the beach recently, and my son got stung by a jellyfish. And to be fair, this was no minor sting.It was one of the worst stings I’ve ever seen, with the burns all over his arms, legs, and side. […]
Prudence
Prudence leads us to be overly cautious when we make estimates about uncertain events. Illustration: You’ve invited 100 guests to a backyard barbeque party. You don’t think you’ll have more than 25-35 attend. So you only prepare enough food and arrangements for 30 or so people. 60 end up coming, and prudence has caused you […]
Framing: Seeing the Whole Picture
Framing occurs when we misidentify the problem, undermining the entire decision-making process. Illustration: There is a small fire in your kitchen over your stove. You make the decision to put it out with a glass of water you had close by. Unfortunately, it was a grease fire, so the water only helped to take the […]
Overconfidence
Overconfidence makes us overestimate the accuracy of our forecasts. Illustration: You just started a fitness routine and you dropped 3 lbs in 3 days. That means if you keep this up for 15 days then you’ll lose 15 lbs. Overconfidence. Picture this at work: the first 10 days of your sales month have been really […]
Confirmation Bias
Confirmation Bias leads us to seek out information supporting an existing predilection and to discount opposing information. Illustration: You’ve just had a heated discussion with a friend about which musician is better between Adele and Justin Timberlake. You, being wise, know that JT is one of the bests of all time. So you pull your […]
Sunk Cost
The Sunk Cost decision-making trap inclines us to perpetuate the mistakes of the past. Illustration: Dating relationships. We’ve all seen it. A couple that is clearly terrible for one another. The relationship is toxic, and if it’s a friend, they might even be candid enough to tell you how hard it is being in the […]
Status Quo
The basic explanation of this trap is that we are biased towards maintaining the current situation, even when better alternatives exist. Illustration: We have a team production meeting every morning in our office. There was a time that everyone on our staff was considered a production worker or was directly related to the production process. […]
Anchoring: Hearing Both Sides
As we’re looking through the 8 psychological decision making traps, we’re starting off with what we call anchoring. Anchoring is what we do when we give disproportionate weight to the first information we receive. It’s a human trait. It’s hard not to do. Illustration: Say your spouse has only good things to say about a […]
Quality as Habit
In the front of our office building in the lobby area, we have a lot of beautiful typographic signage with really powerful quotes. For instance, one is a Henry Ford quote that says, “A business that makes nothing but money is a poor business.” That we put on the walls to help display our culture […]
Be the Buffalo
I’m in a peer advisory group with some other local business owners, and we have a saying that gets thrown around in our monthly meetings from time to time. The saying is “be the buffalo.” Now for some context on the saying. Out in the West, in the open plains where buffalo roam and cattle […]
