Real world effects of cognitive bias and logical fallacy

Everything I know at the peak of my career I learned at the bottom! I had made a mistake, a big, huge mistake. It was the early hours of Valentine’s Day, 14th February 2014. I was sitting up with my wife, and tearfully admitting that the 2-year consulting partnership with my colleague had been a failure. It was probably an unwise decision to go into the partnership in the first place.

Worse, I realized I had been duped by four of the most common human biases. And as a psychologist I was supposed to know about that stuff. After all, I had made a study of bias and logical fallacy. Bias happened to other people.

The self-serving bias is the tendency to seek out information which advances your own self-interests. I was only focused on how much revenue I had brought into the business and how much this supported my own ego.

I realized I had let myself be led by confirmation bias – the wishful thinking for something to be true so you only see information which confirms it. I was focused on what I chose to see that was good about the business and not on what wasn’t working.

I also became aware of how my business partner had been running our partnership as her own company by default. Yet, I also realized that I had allowed this to happen. I hadn’t been willing to let go of the partnership because of sunk cost fallacy – the bias to continue a behaviour or endeavour as a result of previously invested resources (time, money or effort).

In the end we parted amicably. But I had paid a high price for the real-world effects of cognitive bias and logical fallacy.