Recognizing and Addressing Cognitive Biases in Decision-Making

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The chapter explores how confirmation bias and black-and-white thinking can influence decision-making, using examples like a breastfeeding study and the Deepwater Horizon disaster. It emphasizes the importance of critically evaluating claims and recognizing biases that can lead to misinformation, even for intelligent individuals. Practical examples like extreme diets and sustainable finance are discussed to illustrate how overconfidence can impact decision-making.

Alex Edmans shows you how to think smarter, sharper, and more critically so you can make better decisions.

— YOU’LL LEARN —

1) How our biases are holding us back

2) The ladder of misinference that mucks up our thinking

3) Why we end up mistaking statements for facts

Subscribe or visit AwesomeAtYourJob.com/ep969 for clickable versions of the links below.

— ABOUT ALEX —

Alex Edmans is Professor of Finance at London Business School. Alex has a PhD from MIT as a Fulbright Scholar, and was previously a tenured professor at Wharton and an investment banker at Morgan Stanley. Alex has spoken at the World Economic Forum in Davos, testified in the UK Parliament, and given TED/TEDx talks with a combined 2.8 million views. He was named Professor of the Year by Poets & Quants in 2021.

• Book: Grow the Pie: How Great Companies Deliver Both Purpose and Profit

• Book: May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases―And What We Can Do about It

• Book site: MayContainLies.com

• Linked: Alex Edmans

• TEDx Talk: The Pie-Growing Mindset | Alex Edmans | TEDxManchester

• Twitter/X: @aedmans

• Website: AlexEdmans.com

— RESOURCES MENTIONED IN THE SHOW —

• Article: “Addiction Rare in Patients Treated with Narcotics” by Jane Porter and Hershel Jick

• Book: Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones by James Clear

• Book: Deep Work: Rules for Focused Success in a Distracted World by Cal Newport

• Book: Grit: The Power of Passion and Perseverance by Angela Duckworth