Managerial biases such as overconfidence and myopia can explain many failures in business decisions but new research shows how personal biases can be used to improve decision making.
Conventional approaches to eliminating biases focuses on ‘changing the mind’: if people can be trained to recognise their biases and think more logically, better outcomes are likely. However, increasing evidence suggests that such a de-biasing approach is not enough for effective decisions, because it only deals with our conscious half – what Daniel Kahneman famously called System 2. Our automatic half – Kahneman’s System 1 – also plays a role in determining a decision and it is sensitive to our surrounding environment. Even contextual factors, such as the weather being sunny or cloudy, can significantly influence the decisions made.
More of the Continuity Central article
