What is Cognitive Bias?
The term cognitive bias refers to errors that occur unconsciously in a person’s brain. A cognitive bias influences what a person thinks or how they perceive something. When we perceive something, think about something, make a judgment, or recall a certain situation, we are influenced by unconscious processes in the brain.
Cognitive biases occur especially in stressful and complex situations. Examples are events where quick action is required or situations where too much information is present at once. Memories are also susceptible to cognitive bias. These are dynamically stored and retrieved in the brain, meaning that every recall of a memory changes the corresponding entry in the brain and can lead to distortions.
Even routine decisions are subject to this effect, which can have problematic consequences, especially in complex environments.
Cognitive bias in Marketing
Cognitive bias in marketing
Unconscious effects in the mind always influence individual decisions. Therefore, cognitive biases are often used in marketing to increase a company’s revenue and profit. The psychology of people is an important component when developing marketing strategies.
Every time individuals choose products, they give preference to a brand over the competition. Automatisms in the mind can cause irrational behaviour and a reliance on cognitive biases.
What are the different types of cognitive biases?
Throughout human development, cognitive biases occur repeatedly in an attempt to reduce cognitive processing in various ways, allowing people to assess certain situations better and faster. Each person develops cognitive shortcuts over the course of their life. This can lead to patterns of thinking errors that become established, resulting in increased subjectivity.
Cognitive bias is therefore an overarching collective term for typical thinking errors that people encounter and are subject to in everyday life.
Anchoring Bias
Anchoring bias is a systematic distortion in decision-making. A choice or decision is always influenced by a so-called anchor.
The best example of this is salary negotiation in a job. The actual negotiated salary will always be based on the number that was mentioned first during the negotiation. This number is the anchor number.
Halo Effect
This effect is a judgment bias. One characteristic of a person appears so dominant that other characteristics are not considered when evaluating that person.
For example, when meeting a new person, they are perceived as particularly attractive. As a result, it is often automatically assumed that the other qualities of that person are also positive.
Danning-Kruger Effect
The Dunning-Kruger effect is named after the American social psychologists David Dunning and Justin Kruger, who researched this phenomenon in 1999.
It refers to the tendencies of less competent people to overestimate their own abilities and knowledge and to underestimate the competencies of other people.
Confirmation Bias
Confirmation bias aims to only use a problem-solving approach that fits with a person’s existing beliefs and convictions.
Confirmation bias also plays a major role in purchasing decisions: people often choose the product that is in line with their own beliefs. All other products are quickly automatically excluded.
What are Cognitive Errors?
A cognitive error occurs when characteristics of information to be processed are systematically misunderstood and mentally represented. The consequences are usually incorrect decisions or actions that lead to such decisions.
If someone is affected by such errors, problems with mental performance usually arise. Forgetfulness, reduced attention, concentration, and language disorders or even memory loss are then often the consequences.
In cognitive psychology, cognitive errors are researched systematically, especially in relation to perception, judgement, thinking, decision-making and behaviour.
