Confirmation bias

What people believe influences the information that they look for and how thoroughly they analyze it.

Confirmation bias means that we automatically look for information that supports our prior beliefs because we seek affirmation of our views. Belief bias means that we are more likely to dismiss or find fault in information that challenges our beliefs and much more readily accept information that affirms them.

This means that it is often difficult for people to accept information that conflicts with their existing views, for example about certain stocks, even when the data supports it.

One approach to counteracting confirmation bias and belief bias (as well as overconfidence) may be to “consider the opposite”: before making a decision, think about the possibility that your beliefs or predictions could turn out to be wrong, and whether the information you’ve been given could support that possibility. This tactic can help slow down your decision-making and give you time to spot possible mistakes.

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