Dinesh Vernekar

@vernekard

10 biases/concepts to consider when building products from ‘ Thinking Fast and Slow'

Move beyond cognitive load. These ideas will blow your mind.

Biases and effects which affect decision making

We’ve all heard of cognitive load — there’s only so much information the human brain can process at a time, so it’s a good idea to limit the number of options/info being presented to the user.

But there’s so much more to human behavior & thinking than cognitive load. Thinking Fast and Slow is a remarkable book — full of examples and scenarios laying out how humans err while making decisions.

Kahneman breaks up human decision making into 2 systems — system 1 - an intuitive, FAST decision maker and system 2 — a rational, SLOW decision maker. He then uses these 2 systems to demonstrate how errors enter our thinking.

Let me introduce you to the top 10 effects & biases.

1. Confirmation Bias

Confirmation bias — paying more attention to things that reinforce our beliefs

Let me give you an example — you’re doing some user research and a user mentions he has a problem — he can’t find the refresh button. You suddenly remember having the same problem. That’s confirmation bias at work. We seek information which reinforces our beliefs while actively ignoring information contrary to our views. Confirmation bias comes from when you have an interpretation, and you adopt it, and then, top down, you force everything to fit that interpretation.

2. The framing effect

How a question is framed affects the outcome. Suppose you’re considering a surgery for cancer and the doctor tells you — 1 month survival rate is 90%. Pretty good you think. Now consider this — There’s a 10% mortality in first month. Both the statements are logically the same. Emotionally survival is good, mortality on the other hand has alarms bells ringing in our head. This is an important lesson for product managers — your product copy matters.

3. Correlation is not causation

But that doesn’t mean drinking water leads to death :)

Every time we see a pattern we try to explain it. He played poor in the 2nd set because he got tired. There’s a simpler way to explain it — in the long run all things regress(converge) to the mean — you do well sometimes, you do poor sometimes. So just because we see a pattern doesn’t mean it’s related or caused by it.

4. Substitution

We answer the easier question — when we’re asked a complex question, we substitute it with a simpler question — one we can answer. Ex — ’how happy are you with your life?’ these days is substituted with 'what is my mood right now?’ Who should I vote for? Becomes 'which candidate is more likable?’

5. Causes trump facts

Authoritarian leaders and marketing folks have known this for ages. Human beings are moved by anecdotes, individual stories more than they’re moved by statistics and facts. Hence the tobacco ad features Mukesh instead of just rolling stats.

Mukesh Harane — the face of an anti-tobacco campaign by the Indian Govt

6. Sunk Cost Fallacy

We hate loss

You’re probably familiar with this one. The more we invest in something the less likely we’re to let it go. A prime reason people stay in bad marriages, jobs and conditions. Thus it’s important to let your users invest right from the start. Also why it’s difficult to quit FB — we’ve invested so much in it emotionally it’s difficult to let go.

7. Anchoring effect

Does the asking price for a new flat influence affect your judgement of a reasonable buying price? Were you happy to buy a sweater at 1000 down from the 1500 starting price? These are all anchoring effects — an artificial anchor affects how we make decisions. Have you looked at the pricing page of SaaS plans? For example, consider the enterprise tier is for $1,000 a month offering unlimited cloud storage and a professional tier is worth $300 a month offering 750 gigabytes of storage. Since most people won’t need the unlimited storage they would end up purchasing the professional tier and feel they just saved themselves 800 bucks, while you’re be happy they bought your target product.

8. The science of availability/Availability bias

Information that is more 'available' to us affects our decision making. Example — a plane crash covered in media makes us think about the safety of flying. The odds haven’t changed just our feelings about the event. Our feelings and memories are more available to us and hence affect our decision making more than stats which need to be processed by system 2.

9. The Halo effect

If we see a person first in a good light, it is difficult subsequently to darken that light. Our first impressions are usually lasting impressions. Also when a company is doing well we quickly attribute it to the superior strategy, the vision of the CEO etc and when it falters we again exaggerate the role of the CEO, their strategy. This is again the halo effect at work. Thus if users have a good first impression of your product, that effect is likely to continue. Another reason why it’s so crucial to get the app onboarding experience right.

10. Our surroundings affect our decisions

We like to think of ourselves as independent decision makers, capable of making up our own minds. But we’re continually affected by our surroundings and that affects our decisions. Consider ex — big photos of the supreme leader are supposed to prime you for obedience.

That’s it for now. If you liked my post, please click the 'RECOMMEND' button below and do leave a comment! I’ll love to hear from you.

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