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The Daily Decision-20-Impact bias

The Daily Decision-20-Impact bias

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The Daily Decision-19-Empathy gap

The Daily Decision-19-Empathy gap

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The Daily Decision-18-Courtesy bias

The Daily Decision-18-Courtesy bias

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The Daily Decision-17-Gambler’s fallacy … Do you have a hot hand? The chances are low.

The Daily Decision-17-Gambler’s fallacy

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the SEVENTEENTH episode of The Daily Decision

I’ve got a hot hand,  You’re Due for a Win, One Time

Likely you’ve heard this expression and others before that refer to someone who is gambling.

What is the evidence for the hot hand phenomenon? The odds are low.

The Gambler’s Fallacy is the is the belief that, if something happens more frequently than normal during a given period, it will happen less frequently in the future (or vice versa).

In other words, if you’re playing cards and you haven’t seen a 10-card for a long time, you believe that the card is “due” to turn up.

This is incorrect because each event is independent of events that proceed it and come after it.

Take a coin. If you flip it, there is a 50/50 chance that the coin will show heads up or tails up. Every time the chances are the same. The Gambler’s Fallacy is believing that if someone has flipped 7 consecutive heads a tail must come up soon.

Why are we so prone to fall for this erroneous thinking?

It’s because we conceptualize law of large numbers in a way that leads us to believe that the law of 50/50 is adjustable over time when, in terms of a coin, it never is. In your daily life, try to see and assess events independently before grouping them together erroneously.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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The Daily Decision-16-Endowment effect … How much does something cost? Depends on who owns it

The Daily Decision-16-Endowment effect

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the SIXTEENTH episode of The Daily Decision

 How much is a basic coffee mug worth?

It depends.

  • If you want it, not very much.
  • If you have it, very much.

That’s the result of findings from Kahneman, Knetsch & Thaler (1991).

Participants were either owners or buyers. If they simply sat down next to the mug, they suddenly valued the mug at $7.12 on average. If they were asked to act as buyers, they valued the mug at $2.87.

What explains the difference?

The endowment effect. That is people like and value the things they own (or perceive to own) higher than things that they could own.

The next time you try to bargain for something on eBay, remember that owners and buyers value the same item differently.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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The Daily Decision-33-Illusion of transparency

The Daily Decision-33-Illusion of transparency

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The Daily Decision-15-Conjunction fallacy … when is 2 less than 1?

The Daily Decision-15-Conjunction fallacy

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the FIFTEENTH episode of The Daily Decision

Linda is 31 years old, single, outspoken, and very bright. When she was in college, she majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in progressive demonstrations.

Which is more probable now?

  1. Linda is a bank teller.
  2. Linda is a bank teller and is active in the feminist movement.

Most people say B, but the correct answer is A

Why?

This is an example of the conjunction fallacy in decision making and the Linda example is from Kahneman and Tversky 1982.

That is when we hear two things, we automatically add them. After all, 2 is greater than 1 but in probabilities 2 is less than 1.

In Linda’s case, we can assign a 5% probability to Linda being a bank teller and 95% probability of Linda being active in the feminist movement.

When we multiple .05 * .95, we get .0475 which is less than 5%.

When you’re confronted with a decision with multiple parts. Isolate them before considering their connections.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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The Daily Decision-14-Availability bias

The Daily Decision-14-Availability bias

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the FOURTEETH episode of The Daily Decision

Cars or planes? Roofers or Border Patrol agents? Cows or Sharks?

Of these pairs which one is more deadly?

Most people would say flying is more dangerous than driving, being a Border Patrol agent is more dangerous than being a roofer, and sharks are more deadly than cows.

In each case, those answers are incorrect and point out The Availability Bias.

Which is the tendency to overestimate the likelihood of events with greater “availability” in memory

If a memory is recent, unusual, or emotional, it is likely to be more available and more usable to make decisions

Available doesn’t mean accurate however so the next time you hear of a major event on the news, pause to avoid falling into the availability          bias trap.

Ask yourself, just because it’s easier to remember something, does it make it more true?

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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The Daily Decision-13-Anchoring bias

The Daily Decision-13-Anchoring bias

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the THIRTEENTH episode of The Daily Decision

Think of a boat and an anchor. A boat docks close the shore and drops its anchor so it cannot be blown away by the wind.

A psychological anchor is similar. When we believe a piece of information, it is hard to have winds blow us away from that position.

An anchoring bias occurs when we rely too much on one piece of information, usually the first piece of information presented.

In one famous study by Amos Tversky and Daniel Kahneman in 1974, people were asked to estimate how many African countries were part of the United Nations.

There are currently 193.

  • When presented with the number 10, the guesses were lower. Participants estimated that African countries represented 25% of all UN countries.
  • When presented with the number 65, the guesses were higher. Participants estimated that African countries represented 45% of all UN countries.

Think about your own anchors while making a big purchase, say a car or home.

Be aware of how the first number you hear can anchor your decisions, but not always in your favor.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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The Daily Decision-12-Confirmation Bias

The Daily Decision-12-Confirmation Bias

Hello Hello This is Dr. Z, Zachary Brooks, with The Daily Decision

because you want to make better decisions.

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Today is the TWELEVTH episode of The Daily Decision

In the TENTH episode, we began discussing biases that can be divided into 3 types:

decision making biases, social biases, and memory biases

Today we will talk about the “Mother of All Biases.”

Confirmation Bias.

Simply put, Confirmation Bias is the tendency to look, find, and interpret information that confirms an already held belief.

It is the mother of all biases because of its circular nature. It hides inside the starting point of our decisions.

For example, if you believe that left-handed people are more creative than right-handed people, then every time you meet a left-handed person you will unconsciously look for “evidence” to support your existing belief.

In other words, people see what they want to see.

You can use confirmation biases in positive and negative ways. You can look at your students as brilliant or see your employees as underperforming. In both cases, your brain will seek out evidence to support your belief.

Always be woke when it comes to confirmation biases.

Subscribe to Dr. Z Podcasts to follow other programs such as the People Behind the PhDs, Organ Oracles, and Leaders on the Line. All podcasts are based on my upcoming book. The 6A’s a practical philosophy for living life with meaning and purpose.

 Follow me at DR-Z.net, iTunes, and Facebook at DRZPodcasts.

If you have an idea for a podcast, contact me and maybe we can find a way to create your own podcast produced by me, Dr. Z

 As always, Happy Deciding.

 

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