The Sunday Feed!
Snake in my Fish-Tank: Part 2
In part — 1, I wrote about the cognitive mind. It is an amalgamation of Awareness, Education and Experience accumulated over a number of years that results in forming an attitude. Everything else then seems to follow from that. However this mental server of ours, it is blurred at best and the support it gives to our decision-making in most cases is completely faulty. Nonetheless, people do not seem to think so and are pretty happy living with the fallacy.
In this article we will be talking about “Availability Heuristics” — A phenomenon where we make decisions based on the data that is readily and easily available to us. Well, there is nothing wrong with it but theoretically speaking, it is quite blemished. And while small decisions do not have great consequences, they make us habitual to use this bias for serious resolves.
One of the most common places where I have seen this in action is in marketing departments of several companies. The companies often assign small or even large research organisations to do a qualitative study on a topic of interest. And when the findings are out, they use it as a quantitative finding assigning them actual numbers and percentages. If someone were to do an audit on this practise, they will be surprised as to how many companies actually indulge in this sham. And then the companies go ahead and develop the product and launch it in the market after incurring huge costs, not just in production but also in distribution and advertising.
The other problem is that Heuristic availability makes us believe that what we can easily remember is actually true in nature. Statistically, it is believed that much more people succumb to car accidents than plane crashes, yet when it comes to tying a seat belt, they are much more likely to do so on a plane and not in the car. Reason being, a single plane tends to have more collective fatalities as compared to single car. Go to any of the so called “developing countries” and you will find that the concept of wearing seat belts is virtually non-existent, yet, when these people sit in a plane, they never forget to wear one.
One of the most common yet unimaginable fallacies is seen in the financial market. It is believed that when Anne Hathaway was applauded for her role in, “Devil Wears Prada” the real beneficiary in monetary terms was “Berkshire Hathaway”, the company owned by Warren Buffet. Buffet’s company not only grew in image but also reached new heights on the stock markets. See how people themselves seem to pick dots and then happily connect it. It is often believed that a lot of investors lose money because they buy when a company releases a positive result, which, apparently is a time to sell. A lot of mature financial companies understand this myth and use, “Availability Heuristics” to their advantage.
There are 3 times when we most commit this crime of Availability Heuristics:
- When we are multitasking: This is the real pandemic that has infected the entire universe ever since the net has become popular. People think that the more tasks they perform at a time, the more they will be viewed as experts. Nothing can be more far from the truth.
- When we fake to be an expert: One thing that most people struggle today is acknowledging the fact that they do not know anything about most subjects out of their realm. Google has given them a false sense of understanding that if they read a few lines on a topic, they become a subject matter expert.
- When we have mood swings: When we are in a good mood, we become generous and start to take things lightly whereas, if we are having a bad day, we will want to do something to divert attention and thereby make a lot of stupid decisions we would not have otherwise taken.
So the next time, you have to make an important decision, just run through these 3 filters. If you think there is a match, you can either postpone the decision-making or at least be aware. Flaws are difficult to completely eradicate from the system but with a little effort, we can at least minimise them.
