The impact of the ambiguity effect on decision-making

When something is described as ambiguous, it means that it is confusing, unclear, or open to different interpretations. Entrepreneurs face ambiguous situations all the time; it’s the nature of the business. For example, entrepreneurs make decisions about pricing, marketing, vendors, and finances that don’t have certain outcomes. In addition, entrepreneurs often have to make choices …

Read more

Functional fixedness: when we stick to what we know

Surely, a knife is made for cutting things. And you can only use a cotton swab to clean your ears — right? Functional fixedness is a form of cognitive bias which makes us automatically narrow down the function of each tool. Although functional fixedness offers great mental shortcuts, it can present barriers to working to …

Read more

The science of eureka moments

A eureka moment is that magical epiphany when the solution to a problem seems to appear out of nowhere. Also known as an “Aha!” moment, little beats the sudden clarity you feel at solving a puzzle or finally understanding a previously unfathomable concept. Eureka moments can lead to creative discoveries, the triumphant completion of a …

Read more

Decision fatigue: how a burden of choices leads to irrational trade-offs

Have you ever felt like you are too tired to make the right choice between several options, especially after a long series of decisions? Decision fatigue can lead to poor choices and irrational trade-offs in decision making. It refers to the deteriorating quality of decisions after a long session of decision making. Too many decisions …

Read more

The Seven Sins of Memory

“Our memory is a more perfect world than the universe: it gives back life to those who no longer exist,” once said French author Guy de Maupassant. Whether it’s short-term memory allowing us to perform simple calculations on the fly, long-term memory which can store larger quantities of information, sometimes for a whole life span, …

Read more

Egocentric bias: why we feel like the main character in our own movie

Do you have a burning memory of an embarrassing experience that happened to you, and can’t help but think that everyone who was present must still laugh about it to this day? Chances are, most of them don’t even remember any of it. Similarly, have you noticed how we tend to overestimate the amount of …

Read more

Declinism: how rosy retrospection impacts decision-making

“It was better before,” says your friend. “Ha, those were the days,” your reply with a sigh. Declinism is the belief that societies tend towards decline, often linked with rosy retrospection—our tendency to view the past more favourably and the future more negatively. It may seem harmless, but declinism can cloud your judgement and lead …

Read more

The power of simplicity: how to manage our complexity bias

We often tend to prefer complex solutions over simple ones; complicated marketing jargon over clear explanations; multi-steps implementations over more direct execution. Complexity can lend an aura of authority to products, which marketers are exploiting to project authority and expertise. Complex processes can also delay decision-making, giving us the illusion of productivity. Why is it …

Read more