Just waves of confirmation bias?

We recently came across another excellent article on data, decision-making, and cognitive biases.  It’s a story about Kristaps Porzingis , a 7’1″ 19-year-old, playing in Liga ACB, perhaps the second-best basketball league in the world.  He’s “the type of prospect that has historically torn coaching staffs and front offices apart” as they try to assess his NBA bona fides before the draft. All draft picks are crapshoots, but some feel like crappier shots than … Continue reading

March Madness and the availability heurisitic

(Editor’s note:  This is a slightly modified re-print of a popular piece we published in April 2013.  Our readers enjoy the subject of how to improve their decision making skills, especially when sports can provide the context.) Decision making and cognitive biases are common themes here at NVSE.  We’ve written about good board decisions, how the popularity of the Mona Lisa is based on circumstance rather than inherent artistic qualities, how the design of … Continue reading

What color was Dorothy’s dress?

In honor of the 75th anniversary of the release of The Wizard of Oz, we offer three thoughts about a movie whose plot was once humorously summarized as:  “Transported to a surreal landscape, a young girl kills the first person she meets and then teams up with three strangers to kill again.” 1.  Predicting technological trends is not for the weak at heart – and that’s before one tries to protect the IP and … Continue reading

It’s unwise to rely on one’s instincts to decide when to rely on one’s instincts

In Why Great Leaders Don’t Take Yes for an Answer (found in the The Library in St. Pete) Professor Michael Roberto explains how the key to making successful strategic business decisions lies in how you design the decision-making process itself.  A good process will entail “astute management of the social, political and emotional aspects of decision making” and address or at least understand the underlying biases of the participants. We heard echoes … Continue reading

Thinking consciously, unconsciously, and semi-consciously – Part I

Decision making theory is a favorite subject of ours.  We have a few outstanding books in our library, and have written on topics such as confirmation bias (the Yes-Man in your head) and how great entrepreneurs think. One of those outstanding books is Malcolm Gladwell’s Blink: The Power of Thinking Without Thinking, which argues that rapid cognition (the thinking that happens in first two seconds’ worth of instant conclusions) is powerful and important and occasionally really good.  This … Continue reading

Everything is obvious once you know the answer

Mark Twain famously quipped, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Today’s consultants might describe the same phenomenon as confirmation bias in the decision-making process.  It’s one type of cognitive bias, defined as “the tendency to make systematic errors in certain circumstances based on cognitive factors rather than evidence.” Every leader has internal biases, some of them subconscious … Continue reading

It’s easier to rationalize than to be rational

This article by Jason Zweig from the 11/13/09 Wall Street Journal echoes one of our favorite books.  Although this article focuses mostly on stock-picking, we believe the phenomenon of “the confirmation bias” affects all types of decisions and agree with the quotation from Staley Cates at Longleaf Asset Management that “a lot of psychological traps can be combated with humility, but [not this one].” The tips below for fighting the confirmation bias are good ones and … Continue reading

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