Cognitive Biases often lead to bad business decisions

Spot them and think again.



What is a cognitive bias?


Cognitive bias is a consistent error in thinking


It comes from the need to simplify decision-making


It's a shortcut meant to be right some times, but often wrong


Confirmation bias

We seek information that confirms our existing beliefs and reject information that doesn't confirm it. We look to be proven correct, not wrong. 

Error: Confirm what you know and not improve


Sunk cost fallacy

We think we should continue investing effort , time, and money, if we have already invested a lot of it. We don't cut our losses, but we continue on a failing path, just because we've been doing it.

Error: Past commitment makes us continue commitment


Conjunction fallacy

We wrongly think 2 events are more likely to occur than 1 event, if the 2 events make sense. A person is more likely to be tall and good looking than just tall or good looking, because we associate tall with good looks.

Error: We think a good story is more likely than the simplest possibility


Self-serving bias

We take credit for our wins but blame others and external circumstances for failures. This might stem from the need to protect one's self-esteem

Error: Incorrect assessment of what lead to success or failure


Superiority Illusion

More than half the people think they are better than the average. Which can't really happen in your localized sample. of employees. So people think they are superior than most others in their skill.

Error: Employees and companies feel they are better than others leading to entitlement.


Cognitive biases

Use these strategies to limit subconscious biases in decision-making