Bias Blindness Explained

Earlier today, I posted the following on Twitter, whereby I offered a 140 character explanation of bias blindness.

Jason Zweig, the wonderful columnist for The Wall Street Journal, added the following (and I agreed).

As Jason explained via email, “conscious control of unconscious bias is impossible…on an ad-hoc basis.”  Our best hope, we agree, is by instituting careful, blanket policies and procedures to combat them.

As Daniel Kahneman also argues, organizations are more likely to succeed at overcoming bias than individuals. That’s partly on account of resources, and partly because self-criticism is so difficult. As I have argued repeatedly, perhaps the best check on bad decision-making we have is when someone (or, when possible, an empowered team) we respect sets out to show us where and how we are wrong. Within an organization that means making sure that everyone can be challenged without fear of reprisal and that everyone (and especially anyone in charge) can be and is held accountable.

But that doesn’t happen very often. Kahneman routinely asks groups how committed they are to better decision-making and if they are willing to spend even one percent of their budgets on doing so. Sadly, as far as I know, he hasn’t had any takers yet. Smart companies and individuals will take him up on that challenge. Those that are smarter will do even more simply because there’s no substitute for good judgment.

3 thoughts on “Bias Blindness Explained

  1. Pingback: Avoiding the Extremes - A Wealth of Common SenseA Wealth of Common Sense

  2. Pingback: Sheldon Cooper Illustrates Bias Blindness | Above the Market

  3. Pingback: Fireside Markets Episode 11: Tadas Viskanta on Financial Media, Behavior and Evolution of Investors | Bason Asset Management

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