Cognitive Biases Help Navigate Uncertainty

Cognitive biases are often dismissed disparagingly as being irrational—as errors to be overcome in the pursuit of more refined, logical thinking.

However, dismissing these biases as sub-optimal assumes that there is some objectively correct or rational answer, but in many decision-making domains, there's not. People cope rather than optimize, and have evolved cognitive biases and heuristics as a means to negotiate environments of radical uncertainty; this includes many complex decision-making domains, including business, politics, and our social environments. Dismissing these important decision-making faculties as errors in thinking assumes that there are always logical, rational decision available to us. This might be the case in the kinds of small-world experiments that behavioural economists often rely on, but in many cases these experiments can't be extrapolated into the larger, more complex world in which we operate.

Algorithms are not the solution to every decision-making problem; many decisions cannot be reduced to numbers and probabilities. If algorithms were inherently superior to other modes of thinking, we likely would have evolved to think more like computers.


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Citation

Kay, John, and Mervyn King. Radical Uncertainty: Decision-Making Beyond the Numbers. New York, NY: WW Norton, 2020.


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