Monday, June 20, 2011

How to Fight Cognitive Bias

Kahneman, Lavollo, and Sibony discuss how executives can detect biases when reviewing recommendations from others - from the June McKinsey Quarterly:
Executives can’t do much about their own biases, as we shall see. But given the proper tools, they can recognize and neutralize those of their teams. Over time, by using these tools, they will build decision processes that reduce the effect of biases in their organizations. And in doing so, they’ll help upgrade the quality of decisions their organizations make.

Ironically, the first step in checking for detecting biases, many of them caused by deviations from the rational actor model,

1. Check for Self-interested Biases: Is there any reason to suspect the team making the recommendation of errors motivated by self-interest? to use the rational actor paradigm to detect self interested or opportunistic behavior.

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