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Confirmation
bias is the technical name for people's desire to find information
that agrees with their existing view. |
Confirmation
bias refers to a type of selective thinking whereby one tends to
notice and to look for what confirms one's beliefs, and to ignore,
not look for, or undervalue the relevance of what contradicts one's
beliefs. Numerous studies have demonstrated that people generally
give an excessive amount of value to confirmatory information, that
is, to positive or supportive data. |
[Francis
Bacon] "It is the peculiar and perpetual error of the human
understanding to be more moved and excited by affirmatives than
by negatives". |
[Douglas
Adams] "Human beings, who are almost unique in having the ability
to learn from the experience of others, are also remarkable for
their apparent disinclination to do so". |
[Gilovich]
"The most likely reason for the excessive influence of confirmatory
information is that it is easier to deal with cognitively".
It is much easier to see how a piece of data supports a position
than it is to see how it might count against the position. The tendency
to give more attention and weight to the positive and the confirmatory
has been shown to influence memory. When digging into our memories
for data relevant to a position, we are more likely to recall data
that confirms the position. |
[Heuer]
"Information that is consistent with our existing mindset is
perceived and processed easily. However, since our mind strives
instinctively for consistency, information that is inconsistent
with our existing mental image tends to be overlooked, perceived
in a distorted manner, or rationalized to fit existing assumptions
and beliefs. Thus, new information tends to be perceived and interpreted
in a way that reinforces existing beliefs. The objective is to identify
the most fundamental analytical assumptions, then to make these
assumptions explicit so that they may be critiqued and re-evaluated.
AND THIS IS KEY: "...The analyst should then try to disprove,
rather than prove, each of the alternatives. He or she should try
to rebut rather than confirm hypotheses...It is especially
important for the analyst to seek information that, if found, would
disprove rather than bolster his own arguments. One key to identifying
the kinds of information that are potentially most valuable is for
the analyst to ask himself what it is that could make him change
his mind. Adoption of this simple tactic would do much to avoid
intelligence surprises". |
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I'll
See It When I Believe It - A Simple Model of Cognitive Consistency,
Yariv, 2002
"Consider someone who buys an expensive car and later discovers
that it is uncomfortable on long drives. Disagreement, or dissonance,
exists between their beliefs that they have bought a good car and
that a good car should be comfortable. Dissonance could be reduced
by deciding this discomfort does not matter since the car is mainly
used for short trips (decreasing the importance of the dissonant
evidence) or focusing on the car's strengths such as safety, appearance,
and handling (thereby adding more consonant evidence). The dissonance
could also be eliminated by getting rid of the car, but this behavior
is a lot harder than changing beliefs. Moreover, if ambiguous information
about the car arrives (a friend comments "this looks like a
really interesting car"), it is more likely to be interpreted
as supporting the belief that the car is good ("the friend
means the car looks really cool and unique") rather than countering
it ("what is an interesting looking car? The friend must mean
it looks like a real lemon. Maybe the fact it's uncomfortable on
long drives shows."). This example illustrates two cognitive
biases that are consistently observed in agents making decisions
under uncertainty: cognitive dissonance and confirmatory bias. Cognitive
dissonance states that after having taken an action people tend
to change their beliefs about the relative agreeableness of this
action. Confirmatory bias refers to the phenomenon of people interpreting
new evidence in ways that confirm their current beliefs. The abundant
psychological literature on these two biases (overviewed in Section
II) indicates that people behave as if they have a taste for: 1.
consistency between the action taken and the belief held at each
point in the decision process and 2. consistency between beliefs
in di¤erent stages of the decision process". |
On
Confirmation Bias and Deviations From Bayesian Updating, Chetan
, 2003
"Confirmation Bias, predicts that individuals will exhibit
systematic errors in updating despite the existence of learning
opportunities. This paper formulates an experimental design to evaluate
this behavioral heuristic within a non-strategic environment that
motivates subjects financially. Subjects report probability estimates
of the state of the world at the draw of each signal which may be
conservative relative to a Bayesian. Indeed, pilot data indicate
that both conservatism and confirmation bias are present in updating
behavior". |
Pitfalls
to Avoid, RAPPAPORT and MAUBOUSSIN, 2001
"Investors tend to seek out information that supports their
existing point of view while avoiding information that contradicts
their opinion. This trap not only affects where investors go for
information but also how they interpret the information they receive
- too much weight is given to confirming evidence and not enough
to disconfirming evidence. Investors often fall into the confirmation
trap after making an investment decision. For example, once investors
purchase a stock, they seek evidence that confirms their thesis
and dismiss or discount information that disconfirms it. This leads
to a loss of objectivity. We have found one technique particularly
useful for managing the confirmation trap in the expectations investing
process. Ask questions and conduct analysis that challenges your
most cherished and firmly held beliefs about the company and industry.
Posing disconfirming questions opens your mind to alternatives you
haven't fully considered, improving your decision-making and, ultimately,
your investment track record". |
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