Monday, November 1, 2010

Confirmation Bias

You ought to become acquainted with the interesting - and dangerous! - phenomenon of confirmation bias, which is about how people tend to look for information confirming their prior beliefs, and to seek out like-minded crowds to engage with. This tendency, of course, is what's led to our climate of extreme political polarization. And while my simple explanation makes the phenomenon seem fairly obvious, there are more ramifications than you'd imagine.

Confirmation bias is perilous for people who, like me (and, I'm guessing, you), who tend to research issues exhaustively. In so doing, we are almost certain to be unconsciously amplifying our own prejudices by 1. seeking out confirming data more actively than we pursue contradicting data, and 2. conversing with those who share our outlook (who therefore strike us, unconsciously, as more expert and socially attractive). So, yes, this intellectual trap is, weirdly, most insidious for those who are especially curious and thoughtful.

The problem is worse than ever these days, as we plunge into the vast data sea of the Internet. It's often said that the Bible's so long and dense that one can prove virtually any point by some phrase or other therein. So imagine what can be done (and is being done, every second) on the Internet!

Most writing on confirmation bias pertains to investment. But it's worth reading that stuff, because it applies in countless other spheres.

Bloggingstocks sums it up neatly:
Decision-makers often tend to lap up information that reinforces their view of the world and ignore information that undermines that view.This so-called confirmation bias plays out in investor's portfolios every day. That's because if an investor buys a stock, he or she tends to look for information that makes them believe the stock will rise. Investors filter out any negative information. What they should do is ask an objective analyst to weigh all the pro's and con's and make a recommendation about what to do. But thanks to confirmation bias, most investors would ignore such advice anyway.
Here's an in-depth look at confirmation bias from the Wall Street Journal, entitled How to Ignore the Yes-Man in Your Head

An article from Red McCombs School of Business explains how confirmation bias is a particularly strong issue in online communities


mr overnight said...

Another example: as Mad Ave research shows ... people who have just purchased a car will afterwards watch any commercial or ad featuring that car far more intently than ads for other cars. Reconfirming their good judgment.

Jim Leff said...

Not sure I buy that interpretation. Once you buy a car, interest drops in car ads, generally. You do perk up at ads for the car you own, just because iof the familiarity (like the way you'd perk up at mention of your home town on the tv).

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