07 Feb CONFIRMATION BIAS – ARE WE REALLY RIGHT?
Confirmation bias is the cognitive phenomenon, typical of human nature, that leads us to confirm a hypothesis by means of evidence in favour of it, rather than trying to take into account evidence other than what we believe to be correct. This type of bias involves the distortion of information on several levels: the gathering, interpretation and retrieval of information from memory. If one is certain of anything or wants to formulate a hypothesis, one always tends to search for and collect all the data that support it, not accepting or downplaying contrary information. Entrepreneur and shareholder Charlie Munger compares the mind to the egg. You may wonder about the meaning of this comparison. For their closing mechanism at the moment when there is input of a certain information (in the case of the egg, the sperm).
Memory also contributes to the operation of confirmation bias: when one has to prove an idea or hypothesis, it is easier to selectively retrieve from memory only the data that are congruent with the starting pattern.
This practice is also amplified today by the use of social media. Let’s think of someone who has a certain political thought; this person will tend to choose to follow only pages, people and politicians that confirm and reinforce what their thought is.
The same applies to sales. If we have a vegan food shop, in our sales strategy on web and social channels we will include a flow of information regarding animal exploitation and the benefits of nature’s products also through collaboration with influencers in the industry, confirming what are the beliefs of our buyers. Confirmation bias is the limit to innovation, because ‘what is this new product for? we have always sold this, used this…’. All this despite the fact that critical thinking is the basis of our evolution.
In business, you may have a hypothesis that you believe can be proven correct, but if you only look for supporting results, your evaluation of new proposals will not be completely objective. Confirmation bias prevents us from considering all potential outcomes. One should therefore strive to free oneself from preconceptions and beliefs and try to evaluate each proposal by considering the advantages as a basis for market development and avoiding the dysfunctional balances in which we sometimes find ourselves living… but we will talk about this in our next article.