It goes without saying that we make decisions based on the information we have at our disposal. In our previous post, we discussed more than one study which showed how participants were influenced by the order of information when making a decision. Now, just when you thought that was the end of arbitrary information influencing our decisions, there’s one more thing to consider. The order of information can only influence us if it’s actually available to us. This refers to the science of availability and something known as the availability bias within behavioral science.

1. Availability bias
2. Judging frequency
3. Survivorship bias
4. How to overcome availability bias

The availability bias definition refers to how an event that has almost non-existent probability of happening to you can be assigned a reasonable or even high probability by you just because the information is readily available. It’s a mental shortcut that enables us to connect decisions or ideas easily based on instant or vivid examples.

Because you hear stories of muggings and hijackings you think those things have a higher probability of happening to you. Because you hear about a shark attack, the next time you go swimming you think that might happen to you. Even though the probability of these events happening is very low, you’ve heightened its probability because some concept of it has been made available to you. This exposure effect drives cognitive biases.

If you think about it long enough, you’ll agree that this behaviour is ridiculous! Things don’t happen more often in the real world just because we can visualise them more easily. But what we hear about a topic, and how that fits in with what we already think we know, influences how we react to it. Thus, we overestimate the perceived risk of dying in a plane crash rather than being a victim of pancreatic cancer.

When making decisions we are influenced by what’s in our working memory. With this in mind, we cannot underestimate the power of someone’s past lived experience on their future decisions. What you remember from your past influences your future. The memories, stories and examples that are most easily available to us guide us. It’s the cognitive psychology and social psychology driving these cognitive biases. The more recent the event, the more easily recalled.

Our memory is influenced by our emotions, expectations, feelings and what we’ve been exposed to. Social media coverage plays a big role here. An event that is possibly very rare might become more visible to us because there is large coverage of it online. As the news spreads so too does the ease with which we can recall that event. But neither these things influence the probability of the event happening (again).

I fear many professionals fall victim to the availability bias in the workplace. Financial advisors have their favourite products, doctors have their preferred medicines, consultants have their preferred methods. Even though a more appropriate option might exist it’s not front of mind. They have their favourites which they often use and recommend what they know. You come across a new problem and you’re likely to throw a familiar method at it.

In my own work, I struggle with survivorship bias. For one, I’m very aware of confirmation bias and thus always try and find evidence that supports and refutes my claims. But what I find increasingly concerning is that you tend to only find the popular evidence… that’s how search engine optimisation (SEO) works. And just because it’s popular, doesn’t necessarily mean it’s factual. And thus the availability heuristic spins it’s web and survivorship bias sneaks it’s way into the investigative work we might try to do. 

If you haven’t figured it out already, perhaps the best way to use this bias in your favour is to become a storyteller. The more exciting and vivid your story, the easier it will be to convince someone of something. Trial lawyers are masterful storytellers. They’ve figured out that it’s not facts that move people, it’s the stories that do.

• Heuristics and biases in decision making – This was the first post in the series which shares some behavioural economics research. Specifically, the heurstics and biases that influence our relationship with money. It uses System 1 and System 2 thinking examples from Daniel Kahneman’s New York Times best selling book, Thinking Fast and Slow, to help us be more conscious of the workings of our brain. 

• Mirror, mirror, on the wall, stop telling me I’m wonderful – This post focuses on the impact of overconfidence bias in decision making. It introduces the illusion of knowledge bias and the illusion of control bias to illustrate the difference between confidence and carelessness. It also discusses the better than average effect, the self-serving bias and fundamental attribution error. You’ll learn how to confront some unpalatable truths and get out of any false sense of comfort (if you’re up for the challenge?).

• Why you can’t argue with a vegan – Ballsy title, we know. But if you read the post you’ll (hopefully) understand why. We’ll be discussing confirmation bias. It’s one of those psychological biases that you can see everywhere. We’ll also touch on cognitive dissonance theory. We all struggle with these biases. They’re both humorous and serious. But because of that, it’s useful to know how to avoid confirmation bias when you need to.

• Size does matter… when it comes to framing – This post uses framing effect examples to show how framing bias influences the way we interpret information and make decisions. We discuss glossing, the compromise effect, and how the size of the frame can influence the volatility of your investment portfolio.

• Loss aversion vs risk aversion – Once you understand framing, you’re ready for this post. It introduces an incredibly powerful bias known as loss aversion. It also touches on prospect theory, the disposition effect and impression management.

• Anchors pulling you down? – Anchoring bias is a straightforward behavioural bias that causes us to focus on a certain initial value and then make decisions with reference to it. This posts looks at some examples of this anchoring effect.

• The danger of the default – Default options nudge us to make better decisions. The option of opting out also respects freedom of choice. This post unpacks this notion of libertarian paternalism and the perils of status quo bias.

• Regret, it’s not a nice feeling – Regret influences the decisions we make and pushes us to conform to social norms. Examples of regret avoidance show us how this makes complete sense yet no sense at all.

• When the past influences the future – The Concorde effect is a famous example of sunk cost investment. Too often we invest time, money and energy into something we should’ve just abandoned. This post looks at some examples of how sunk cost fallacy affects our human decision processes.

• What’s mine is more valuable – In this post, you’ll learn why you place extra value on things you own. The endowment effect has implications for our investment portfolio, bonuses and consumer behaviour.

• How to improve self-control – Self-control is an essential life skill. It’s what separates humans from the rest of the animal kingdom. Learn how to improve self-control to achieve your long-term goals.

• Procrastination is the enemy of success – We know procrastination is the enemy of success. But while it looks like laziness, it’s often just mental exhaustion at play. Learn how to overcome procrastination.

• The problem with wanting it now – When you delay instant gratification, you will experience long-term satisfaction. It’s the hyperbolic vs exponential discounting debate. Don’t let present bias win!

• The power of first impressions – The order of information influences your decisions. First impressions matter! It’s all got to do with primacy and recency effects.

• Learn to deal with uncertainty – Risk and uncertainty will always surround us. Gambler’s Fallacy, the hot-hand effect, the law of small numbers & ambiguity aversion are just some of the biases that arise because of it.

• Stop stereotyping – Representativeness heuristic refers to the fact that we stereotype. It’s a mental shortcut. But beware of making unfounded comparisons.

• Mental Accounting – Money is money! Or is it? Mental accounting says we place different values on different money which leads to irrational decision making.

• Money Illusion– Money illusion is a sneaky bias. It causes us to focus on the amount of money in our hands, rather than it’s purchasing power.

• Home bias – We invest close to home and in what we know. But this lack of diversification results in missed opportunities. Say hello to ‘home bias’.