The way the human brain works can sabotage the choices we make!
Hammond, Keeney and Raiffa – in their 1998 HBR piece ‘The Hidden Traps in Decision Making’ – list eight psychological traps that are likely to affect the way we make business decisions…
- The Anchoring Trap leads us to give disproportionate weight to the first information we receive.
- The Status-Quo Trap biases us toward maintaining the current situation, even when better alternatives exist.
- The Sunk-Cost Trap inclines us to perpetuate the mistakes of the past.
- The Confirming-Evidence Trap leads us to seek out information supporting an existing predilection and to discount opposing information.
- The Framing Trap occurs when we mis-state a problem, undermining the entire decision-making process.
- The Overconfidence Trap makes us overestimate the accuracy of our forecasts
- The Prudence Trap leads us to be overcautious when we make estimates about uncertain events
- The Recallability Trap leads us to give undue weight to recent, dramatic events
The best way to avoid all the traps is awareness. Forewarned is forearmed!
For more detailed solution themes, read the full article here.