You would’ve probably come across netizens squabbling over various socio-political issues. Many of them blindly follow what their favorite influencers are saying or their close circles are supporting. Herd mentality has become the norm, where individuals are influenced by their emotions, rather than independent thought and analysis.

Herd mentality on the internet is just one example of biases in decision-making. We resort to biases from time to time.

However, our line of reasoning shouldn’t be influenced by our personal beliefs. Read on to understand why.

Understanding Cognitive Biases In Decision-Making

In the early 1970s, cognitive psychologists Daniel Kahneman and Amos Tversky introduced the concept of cognitive biases in their book, Judgment Under Uncertainty (1982). They explained how cognitive biases lead to poor decision-making and missed opportunities. A cognitive bias (also known as psychological bias) are mental shortcuts that we take to make decisions or take actions. We tend to behave in an illogical way as these biases distort our way of thinking.

Biases in decision-making are rooted in past experiences. We tend to apply prior knowledge depending on the outcome it led to. For example, if you were able to increase sales last quarter because of a new strategy, you’re likely to apply that knowledge again in similar situations because it led to a favorable outcome. Biases make it difficult to imagine alternatives and think more divergently. This can eventually impact our creative and critical thinking skills, which is why it’s absolutely crucial to keep our decision-making biases in check.

Common Biases And Errors In Decision-Making

Let’s look at some common decision-making biases and errors that have a powerful influence on how we think, feel and behave.

  1. Confirmation Bias

We tend to favor information that conforms to previously held beliefs. We don’t want to change our opinions and rethinking something is uncomfortable and difficult. For example, a hiring manager wants to hire employees only from premier institutes of the country because they’re considered to have the smartest and most talented candidates.

  1. Availability Heuristic

We estimate the probability of something happening by placing importance on the first thing that comes to our minds. We judge something by how we remember certain information. For example, you may be afraid of speaking up in group meetings because your suggestions were heavily criticized in the previous one.

  1. Hindsight Bias

One of the most common decision-making biases, hindsight bias is the tendency to look back at past events and say “I knew it all along”. For example, if a manager is uncertain about an employee’s ability to meet a deadline but the employee manages to do so, the manager is likely to behave as if they had faith in the employee all along.

  1. Optimism Bias

This psychological bias is rooted in the availability heuristic. The tendency to be extremely optimistic and overestimate the likelihood of good things happening is known as optimism bias. For example, many of us procrastinate because we’re certain of finishing our projects just on time. While it may not be necessarily bad, optimism bias can give us a false sense of hope—affecting our mental and emotional well-being in the absence of desirable outcomes.

  1. Halo Effect

Human brains get lazy sometimes and rely on the first impression they have of others. The halo effect bias encourages us to focus on certain attributes (mostly outward appearance) to form the initial impression about a person. For example, you’re more likely to team up with someone who can present themselves well and make a positive impression with their thoughts and ideas.

Dealing With Biases In Decision-Making

We resort to mental shortcuts because it’s impossible to process all the information every time. Decision-making biases are not all that bad because they help us adjust to ever-changing environments. However, we must keep these biases in check and here are a few effective tips to deal with them more effectively:

  • Reject stereotypes and try to judge someone depending on your interaction with them or the current situation.

  • Let go of the past. You need to move on from past instances and not completely rely on them for future situations. Treat every situation uniquely.

  • One bad decision isn’t the end of everything. Acknowledge that you made a mistake and avoid dwelling on things that are beyond your control.

  • Get a fresh perspective on the situation by asking someone to play the devil’s advocate.

  • Consider the factors that influenced your decisions—are they rooted in overconfidence or self-interest? Write down the factors and beware of the interferences.

Harappa Education’s Making Decisions course equips you with frameworks to process, reflect and include multiple perspectives for informed decision-making. There’s a section on the PRISM Framework, a mental model to help you avoid the negative consequences of cognitive biases. The Uncertainty Toolkit will help you navigate tricky situations while making decisions. Arrive at smart decisions and tackle your decision-making biases today!


Explore topics such as Decision-MakingTypes of Decision-MakingStrategic Decision-Making & Decision Tree Analysis from Harappa Diaries and learn to make decisions without any personal bias.

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