Confirmation bias is our tendency to seek information that confirms our beliefs. In this process, we ignore information that disproves our beliefs.
I knew I was right!
We all have a tendency to believe that our beliefs are right, and anything contrary to that is wrong. I am right, you are wrong!
How many times has it happened that:
- you decided to buy a stock,
- some negative news pops up, which you ignore as irrelevant,
- then went ahead and bought the stock
- you continue to find justifications to prove that your decision was right
How many times has it happened that:
- you decided to buy something expensive (car, electronic items, house etc.)
- you imagined yourself enjoying it,
- some negative review or information comes up, which you ignore as being biased, irrelevant or stupid, and
- went ahead and bought it
Having already taken a stance on something, we find it difficult to change that belief. Tremendous mental energy needs to be spent on adjusting current beliefs, which nobody wants to do.
Thomas Gilovich, Professor of Psychology at Cornell University, puts it best:
The most likely reason for the excessive influence of confirmatory information is that it is easier to deal with cognitively.
In the book “Mistakes Were Made (But Not by Me!)“, the authors say that once we are invested in a belief and justified its wisdom, changing our minds is very hard. So, we try to justify it.
How to cure this bias
There are two ways to do this:
- Actively seek disconfirming information: Read articles that go against our beliefs. Ask your friends or colleagues to prick holes in your pet ideas. Objectively assess whether our opponents are right or wrong.
- Avoid being emotionally attached to any belief or idea: Understand that your idea is only one of the ways to achieve something. It may not be the only or best way. There could be many better ideas out there. Understand that your beliefs were formed mostly by looking from your side of the story. The story could be very different, looking from the other side.
If you have studied statistics, you might be familiar with ‘hypothesis testing’. The first step in doing this is to state the hypothesis which you believe is true (calling it ‘null hypothesis’), and then try to disprove it. If you cannot disprove it, you accept it.
Think about it. You are not trying to prove it. You are trying to disprove it.
“Beliefs are hypotheses to be tested, not treasures to be guarded.” – Philip Tetlock in the book Superforecasting
This is the best way to cure confirmation bias.
“We spend most of our time breaking things and trying to prove that we’re wrong.” Astro Teller, Chief of Moonshots, Google
Dr Alice Stewart (1906-2002) was a physician and epidemiologist specialising in social medicine and the effects of radiation on health. She is acclaimed for her ground-breaking finding in the 1950s that x-raying pregnant women causes cancer for the children. To ensure that she is right, she partnered with statistician George Kneale. He said: “My job is to prove Dr. Stewart wrong”. Watch the below TED Talk in which Margaret Heffernan explains this:
Confirmation bias is very prevalent in investing. It mostly arises, as investors try to guard their pet ideas.
You should ask these questions:
- Is there any evidence to disprove your favorite investment idea? Try to kill your best ideas.
- One you invest in a stock, do you try to find justifications later that what you did was indeed the right decision?
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact. – Warren Buffett
- Do not disregard the opinions of those who have opposing ideas and views. Objectively assess their views. Are you sure that you are right? And why?
- In the book “Mistakes Were Made (But Not by Me!)” the authors advice us: while taking big decisions like, buying a car or taking an expensive course – don’t ask somebody who has already done it – they will be motivated to justify the decisions they have already taken. They will be biased.
Here is a quote from Jason Zweig on confirmation bias:
— Morgan Housel (@morganhousel) December 8, 2016
- Always actively look for disconfirming views.
- Don’t be emotional about your beliefs and ideas. You don’t have to guard them.
Wikipedia: Confirmation bias
Featured image: Pixabay