One of the most important part of running an online business is making decisions. Our everyday work involves making many decisions – decisions on which market to target, which contractor to choose, which employee to hire, etc. These decisions, I am sure you agree, are to be made on sound logical thinking void of any bias or emotion to make the right decision, make more money and achieve our goals.

Our brains were not made to think. They were made to react. The first time we touched fire and burnt our skin we learnt what to do the next time we encounter fire. The ability to think is just a side effect just like the ability to play awesome 3D action games on a personal computer that was made to run word processors and spreadsheets. Back in the day this serves us well – we needed to react instantly. The world was a dangerous place and these reactions helped us survive.

Now We React Less, Think More

Today we don’t do as much reacting as we used to do. We do a lot more thinking. We are not in danger of being eaten by a tiger. Our brain is wired to find quick and dirty reactive solutions which are not always the best solutions. These are good when we are trying to survive in a rain forest but not so good when trying to negotiate a contract or forming a business deal.

Most people attempt to solve problems by playing around with the issues at hand and then making decisions based on faulty logic, biases, emotions, cognitive dissonance resolution and other shortcuts. We may rationalize our decisions afterward, but in reality our solutions are based almost entirely on gut feelings, emotional reactions, and hidden biases. As a result, our solutions tend to be no more valid than the architectural designs built by a child playing with blocks.

Almost everyone makes irrational decisions

Most people make decisions about a problem at hand based on faulty logic, biases, emotional and reactive thinking. A lot of time our decisions are just reactions. Once we make the decision and act on it, we rationalize our decisions after we made them gathering logical reasons to support the decision. But in reality our solutions came from gut feelings and emotional reactions and hidden biases which we are not aware that we have. As a result we make many irrational decisions in our professional and personal life.

One of the many reasons we don’t make well thought out decisions is because of biases. In this  post series I will go into the various factors that color our decisions and keep us from making correct decisions in our personal and professional lives.

There are many biases under which we act. One such bias is confirmation bias.

Confirmation Bias

It is a tendency of people to prefer information that confirms preconceptions, hypotheses whether or not they are true. It will cause us to reject and forget evidence that proves the contrary of our biases. It makes us ignore/devaule information/evidence that is in contrary to our beliefs. This bias causes people to prefer information that confirms their preconceived notions. It makes you see what you want to see. Confirmation biases lead to faulty decision making.

For example: you may believe that astrology actually works. As a result of confirmation bias you’ll remember only those instances when when the prediction in the astrology column came true and forget the majority of the cases when the prediction was very wrong. As a result you will continue to believe astrology has some base in reality.

What are the effects of confirmation bias?

1. Creates beliefs on false premises

If you act under confirmation bias you will believe claims that aren’t true – they have no basis in reality. We all get some vague hypothesis in our minds. When acting under confirmation bias you will seek only the evidence that proves the hypothesis to be true. Even if you come across evidence that clearly contradicts the hypothesis. You will come across evidence that will prove the contrary but you will ignore than and will not remember them. So you will believe a claim or hypothesis that is not true.

To make matters worse, our beliefs aren’t isolated. Our sub conscious mind forms beliefs by inference based on existing beliefs. Beliefs combine together to form more beliefs. More faulty irrational decisions.

2. Creates Outdated Beliefs

It can cause outdated beliefs. A belief you held would have been true at a time. But because of confirmational bias you will ignore evidence that built up over time that show that your belief is no longer true.

For example, let’s say you believe that creating and submitting youtube is the best way to market a blog. You tirelessly make videos everyday and submit them to youtube. Although it worked once or twice, you will ignore all the e

3. Keeps You Acting In Outdated Behavior

When you have outdated beliefs you keep acting in old ways. For example, long after buying television advertising isn’t working you may keep buying television advertising when doing so is not profitable anymore. Under confirmation bias. You will have forgotten all the instances when your company incurred a loss and will only remember the instances when there was some profit.

4. Shows you a pattern where there isn’t any pattern

Confirmation bias makes you see patterns where there are no patterns.

5. Gives you fictional experiences

Researchers at California Institute of technology conducted a experiement as a part of a research:

They scanned the brains of 21 volunteer wine novices. They were administer tiny tastes of wine, measuring the senseation in the medical orbitofrontal cortex, the part of the brain where flavor responses register. The subjects were told the price of the wines without their knowledge they tasted the same wine twice.

They invariably preferred the one they thought was more expensive.

Why should you be concerned about confirmation bias?

1. For A Realistic View Of The World – Our beliefs act as filters of reality. To have a realistic view of the world we must question our beliefs deliberately and consciously and find out if they are based in reality or are they just a result of having sought confirmation for some vague notion that entered our mind.
2. To Make Rational Decisions - Confirmation biases cloud our decisions. When we form beliefs on this kind of bias, we delude ourselves. We always form decisions based on beliefs we already hold

What are the real world products of confirmation bias?

1. Psychics – A psychic who claims to know about your deceased relative will give very general descriptions about the relative and their relationship with the client. They say something like “why do I sense this distance” and the client goes “yeah, ronnie didn’t like it when I talk about our relationship”. The client mistakenly believes that the psychic actually has “psychic” powers.
2. Lawyers – The job of the lawyer is to gather evidence and make the case for a particular side of a court proceeding. Whether or not that’s true. Gather evidence that proves it – confirms it and present it at the court.
3. Politicians – Politicians make a living by telling you what the public want to hear. Politicians appease the public sentiment even if the public supports and wants slavery. Politicians sell hope -”change we can believe in”. They echo the opinion of the general public and get the most votes.
4. Placebos – Placebo are medicinal tablets used to “treat” patients. These tablets are basically nothing. It is usually a capsule filled with sugar. The patient is told that the capsule is a very powerful medicine and they should absolutely take the course of the treatment religiously. The patient doesn’t know that it’s an inert tablet and somehow they get better anyway.
5. Magic tricks
6. Wine tasters
7. Conspiracy theories (moon landing, world trade center, etc)
8. Books like Outliers, The Tipping Point, Freakonomics, Superfreakonomics

What can you do about confirmation bias?

1. Ignore The polarized, Neutralize Your Customers/Audience

There are some people you simply cannot persuade, ignore them. As for the others, , put your audience and customers in a state of persuadability. That is why before you persuade your prospects to buy from you or trying to persuade your blog subscribers or newsletter subscribers, you must:

1. Establish Common Ground: Gain their attention and trust by establishing your common ground. Make it clear to them that you share their views and values.
2. Present Your Logic: present your arguments that logically lead your audience to the conclusion.
3. Call To Action: Ask your audience to perform the action that you want them to – buy your product or service, subscribe to your newsletter, donate to your cause or whatever else action you want them to take.

2. Clean out your belief system

You already have many beliefs made on confirmation bias. To  make sound decisions you must have a realistic view of the world. For a realistic view of the world you must form beliefs objectively without bias. You have to take the time to actively question your beliefs. It takes a great deal of courage and effort to question your most fundamental beliefs.

Examine your feelings closely and be brutally honest with yourself. Don’t worry about someone reading what you’ve written down. First get it out. The truth really does set you free. Sometimes we think we believe something that the majority of society believes but we really believe something else.

This means you must purposely set time aside for a few days, sit quietly, grab a pen and paper and start examining your beliefs consciously.

3. Analyze information objectively

We get information from all kinds of sources – television, friends, colleagues, newspapers, rss feeds, websites are some of them. We make decisions based on the information we receive. Start analyzing the information objectively – check the sources.

I’ve found that other people are a major source of illogical, distorted and biased opinions disguised as facts. Many people will not take it lightly when you question their every opinion and may get offended and shun from being open to you. Tread carefully.