Present basis is our tendency to prefer immediate rewards at the expense of long-term goals. It’s a hangover from our ancestors who, in their struggle for survival, grabbed whatever was within reach, rather than risk waiting for better opportunities in the future (because ‘future’ meant ‘less certain’).
Ask your grandparents about when they were younger. You’ll probably be told about how great everything was back then, especially compared to now. Or think back to 2019 – everything was amazing, we didn’t have to think about masks, and there wasn’t a daily COVID-19 infection or death rate broadcast on TV.
But were things really as good as we remember them? The cognitive bias rosy retrospection can help explain why we view the past with rose tinted glasses.
Have you heard someone mention a fear of the unknown when deciding against getting involved in a situation? Have you ever avoided a situation because you feel the outcome is unknown? You’re presenting a behaviour known as Ambiguity Aversion; the tendency to favour the known over the unknown, including known risks over unknown risks.
Why are the answers to a test so obvious after you’ve taken that test? And why do you think of so many good comebacks after you’ve walked away from an argument? Many events, such as the Titanic and football not coming home, seem so predictable after they have happened. Why? The answer is simple: Hindsight Bias.
Imagine you want to learn how to play blackjack, and you have the chance to choose your teacher from one of three players. After watching them play several hands, player 1 has won £100, player 2 has won £50 and player 3 has lost £100. If you asked player one to teach you how to play because they won the most money, then you are falling prey to Outcome Bias. Did they win the most money because they made the best decisions? Or did they win the most money despite the poor quality of their decisions?
