framing-bias

Framing Bias

Framing Bias refers to how the presentation of information can influence decision-making. It relies on context, emotions, and perceived risks to shape choices. Organizations use it in marketing, politics, and media for persuasion, but it can pose challenges due to biased framing and incomplete information. Examples include healthcare decisions, investments, and political campaigns.

Definition and Overview

  • Framing Bias, also known as frame of reference bias or framing effect, is a cognitive bias that occurs when people make decisions or interpret information based on how it is presented or framed, rather than on the actual content or facts.
  • It suggests that the way information is framed or presented can significantly influence people’s perceptions, judgments, and decisions.

Key Concepts and Elements

  • Positive vs. Negative Framing:
    • Framing bias can manifest in various ways, including positive and negative framing. Positive framing emphasizes potential gains or benefits, while negative framing highlights potential losses or drawbacks.
  • Perspective Dependence:
    • The bias is often dependent on the individual’s perspective and how information is presented to them. The same information can yield different outcomes based on its framing.
  • Framing Effects on Choices:
    • Framing bias can impact decision-making, with individuals making different choices when presented with the same information framed differently.

Causes and Influences

  • Language and Communication:
    • The language used to present information can introduce framing bias. The choice of words, tone, and context can all influence how information is framed.
  • Media and Advertising:
    • Media outlets and advertisers often use framing techniques to shape public opinion and consumer choices. The framing of news stories or product descriptions can sway perceptions.

Signs and Indicators

  • Inconsistent Decision-Making:
    • Individuals who exhibit framing bias may make inconsistent decisions when presented with the same information in different frames.
  • Emotional Response:
    • Emotional responses, such as heightened fear or enthusiasm, may be triggered by framing, influencing the perceived significance of information.

Assessment and Measurement

  • Decision Analysis:
    • Decision analysts and researchers use experiments and decision scenarios to assess framing effects and measure the impact of different frames on decision outcomes.
  • Content Analysis:
    • Content analysis of media, advertising, and communication materials can reveal instances of framing bias in how information is presented.

Importance and Applications

  • Public Policy:
    • Framing bias can influence public opinion on policy issues. Policymakers may strategically frame information to gain support for their initiatives.
  • Marketing and Advertising:
    • Marketers use framing techniques to make products or services more appealing. Positive framing may emphasize benefits, while negative framing may highlight problems solved.

Enhancing and Influencing Framing Bias

  • Awareness and Education:
    • Raising awareness about framing bias and its impact can help individuals recognize and mitigate its effects on decision-making.
  • Neutral Framing:
    • Presenting information in a neutral and balanced manner can help reduce the influence of framing bias, allowing individuals to focus on the facts.

Challenges and Controversies

  • Subjectivity:
    • Determining what constitutes neutral framing can be subjective, and individuals may interpret framing differently.
  • Ethical Concerns:
    • Some argue that intentionally using framing to manipulate perceptions or decisions raises ethical concerns, particularly in media and advertising.

Examples of Framing Bias:

  • Healthcare Choices:
    • When healthcare providers present treatment options to patients, the way these options are framed can significantly influence patients’ decisions. For example, presenting a surgical procedure as having a “90% success rate” may be more persuasive than describing it as having a “10% failure rate.” Patients may perceive the procedure more positively when framed in terms of success.
  • Investment Decisions:
    • Investors’ choices can be influenced by the framing of financial risks. If an investment opportunity is framed as “low-risk” compared to an alternative investment framed as “high-risk,” investors may be more inclined to choose the option with the lower perceived risk. This framing affects how individuals allocate their financial resources.
  • Political Campaigns:
    • Political candidates and campaigns often employ framing techniques to influence voter behavior and opinions. For instance, when discussing economic policies, a candidate may frame their proposal as “tax relief for hardworking families,” aiming to evoke a positive emotional response. Conversely, opponents may frame the same policy as “tax breaks for the wealthy,” attempting to generate negative emotions and sway public opinion.
  • Environmental Advocacy:
    • Advocacy groups and environmental organizations may use framing to garner support for conservation initiatives. When discussing climate change, they might frame the issue as a “global crisis with catastrophic consequences” to convey urgency and motivate action. Alternatively, they could frame it as an “opportunity for sustainable innovation” to emphasize potential positive outcomes.
  • Food Labeling:
    • The way food products are labeled and described can impact consumer choices. A product labeled as “organic and pesticide-free” is framed to highlight its health and environmental benefits, potentially attracting health-conscious consumers. Conversely, a product labeled as “traditional and authentic” may appeal to consumers seeking traditional flavors and experiences.
  • Legal Cases and Courtroom Strategies:
    • Attorneys and legal professionals often use framing techniques in legal cases to influence jurors’ perceptions. For instance, during a criminal trial, the defense may frame the defendant’s actions as a “misguided act of youthful rebellion,” aiming to generate empathy and reduce the severity of the charges. The prosecution, on the other hand, may frame the same actions as “reckless endangerment,” emphasizing the potential harm caused.
  • Financial Planning and Retirement:
    • Financial advisors and retirement planners may use framing when discussing financial goals and strategies with clients. Framing retirement as “financial independence and a life of leisure” can evoke positive emotions and motivate individuals to save and invest. Conversely, framing it as “financial uncertainty and dependency” may encourage more cautious financial planning.

Key Highlights of Framing Bias:

  • Context Dependence: Framing bias emphasizes the context in which information is presented. The same information can lead to different decisions when framed in various ways, highlighting the importance of presentation and communication.
  • Emotional Framing: Emotional responses play a significant role in framing bias. The emotional tone and appeal of a message can evoke specific feelings in decision-makers, influencing their choices.
  • Perception of Risk: Framing can alter the perceived level of risk associated with different options. Options framed as low-risk may be favored, even if the objective risks remain unchanged.
  • Persuasion: One of the primary benefits of framing bias is its effectiveness in persuasion. By framing information in a certain manner, communicators can influence individuals’ decisions and actions.
  • Message Clarity: Effective framing involves presenting information in a clear and compelling manner. Clarity in communication is essential for framing to have the desired impact on decision-makers.
  • Biased Framing: A significant challenge associated with framing bias is the potential for biased framing, where information is intentionally manipulated to guide decisions toward a specific outcome. This can result in deceptive or unethical communication.
  • Information Bias: Another challenge is information bias, where framing decisions may rely on incomplete or biased information. Inaccurate or selectively presented information can lead to distorted perceptions and decisions.
FrameworkDescriptionWhen to Apply
Prospect TheoryProspect Theory: Prospect theory posits that individuals make decisions based on potential gains and losses relative to a reference point, rather than absolute outcomes. Framing bias can influence decision-making by altering the way choices are presented, leading individuals to exhibit risk-seeking or risk-averse behavior depending on whether the options are framed as gains or losses. Prospect theory emphasizes the asymmetrical impact of gains and losses on decision-making and highlights the role of cognitive biases such as loss aversion and the endowment effect. By understanding prospect theory, interventions can mitigate framing bias by presenting information in neutral or balanced ways, avoiding manipulative framing, and providing decision aids to enhance rational decision-making. Strategies such as scenario planning, decision trees, and framing interventions can help individuals overcome framing biases and make more informed choices.Mitigating framing biases and enhancing decision-making through prospect theory principles, in financial planning, risk management, or investment decisions where organizations aim to promote rational decision-making, in implementing interventions or workshops that provide scenario planning and decision trees to mitigate framing biases, in adopting strategies or approaches that facilitate information presentation and decision aids through prospect theory principles and practices.
Anchoring and AdjustmentAnchoring and Adjustment: Anchoring and adjustment refers to the cognitive bias where individuals rely heavily on initial information (anchor) when making decisions, subsequently adjusting their judgments or estimates from that starting point. Framing bias can occur when the initial framing or presentation of information acts as an anchor, influencing subsequent evaluations or decisions. Anchoring and adjustment bias can lead individuals to overvalue or undervalue information based on its initial framing, affecting perceptions of value, risk, and opportunity. By recognizing the influence of anchoring and adjustment, interventions can promote awareness, encourage critical evaluation, and provide decision-making tools to mitigate framing bias. Strategies such as cognitive debiasing techniques, counterfactual thinking exercises, and decision aids can help individuals overcome anchoring and adjustment biases and make more objective judgments and choices.Promoting critical evaluation and objective judgments through anchoring and adjustment principles, in negotiation strategies, pricing decisions, or performance evaluations where organizations aim to minimize cognitive biases, in implementing interventions or workshops that provide cognitive debiasing techniques and decision aids to mitigate framing biases, in adopting strategies or approaches that facilitate counterfactual thinking and promote awareness through anchoring and adjustment principles and practices.
Confirmation BiasConfirmation Bias: Confirmation bias refers to the tendency for individuals to seek, interpret, and remember information in a way that confirms their preexisting beliefs or hypotheses while disregarding contradictory evidence. Framing bias can exacerbate confirmation bias by presenting information in a way that reinforces individuals’ existing perspectives or biases, leading to distorted judgments or decision-making. Confirmation bias can influence perceptions of risk, opportunity, and uncertainty, shaping individuals’ responses to framed messages or situations. By recognizing the impact of confirmation bias, interventions can promote cognitive humility, encourage diverse perspectives, and provide mechanisms for challenging ingrained beliefs. Strategies such as devil’s advocacy, perspective-taking exercises, and diversity training can help individuals mitigate confirmation bias and foster more open-minded and evidence-based decision-making.Encouraging cognitive humility and diversity of thought through confirmation bias principles, in team discussions, strategic planning, or policy development where organizations aim to promote critical thinking and innovation, in implementing interventions or programs that provide devil’s advocacy and perspective-taking exercises to mitigate framing biases, in adopting strategies or approaches that facilitate diversity training and foster open-mindedness through confirmation bias principles and practices.
Priming EffectPriming Effect: The priming effect refers to the influence of subtle cues or stimuli on individuals’ subsequent thoughts, behaviors, or judgments. Framing bias can be influenced by priming effects, as the framing of information can prime specific mental associations or schemas, shaping individuals’ perceptions and decision-making processes. Priming effects can operate at a subconscious level, leading individuals to interpret information in line with activated mental constructs or stereotypes. By understanding the power of priming, interventions can mitigate framing bias by providing counter-priming stimuli, increasing awareness of potential biases, and promoting reflective decision-making processes. Strategies such as mindfulness practices, stereotype replacement techniques, and diversity interventions can help individuals recognize and counteract priming effects, fostering more objective and inclusive judgments and choices.Increasing awareness and promoting reflective decision-making through priming effect principles, in diversity training, bias awareness workshops, or consumer behavior research where organizations aim to mitigate unconscious biases, in implementing interventions or workshops that provide mindfulness practices and stereotype replacement techniques to counteract framing biases, in adopting strategies or approaches that facilitate diversity interventions and promote inclusive decision-making through priming effect principles and practices.
Framing Effects in MarketingFraming Effects in Marketing: Framing effects in marketing refer to the ways in which the presentation or framing of information influences consumers’ perceptions, attitudes, and purchasing decisions. Framing bias can manifest in marketing contexts through the use of persuasive language, visual imagery, and contextual framing to shape consumers’ preferences and behavior. Marketing messages can be framed positively to emphasize benefits or negatively to highlight risks or limitations, influencing consumers’ perceptions of value and desirability. By understanding framing effects in marketing, interventions can optimize messaging strategies, tailor communications to target audiences, and mitigate potential biases in consumer decision-making. Strategies such as A/B testing, message framing experiments, and customer segmentation can help marketers identify effective framing strategies and enhance the impact of marketing campaigns while minimizing framing biases.Optimizing messaging strategies and minimizing bias in marketing campaigns, consumer research, or brand messaging where organizations aim to maximize consumer engagement and satisfaction, in implementing interventions or experiments that use A/B testing and message framing to identify effective communication strategies, in adopting strategies or approaches that leverage customer segmentation and tailor messaging to target audiences through framing effects in marketing principles and practices.
Framing Effects in Public PolicyFraming Effects in Public Policy: Framing effects in public policy refer to the ways in which policy issues are presented or framed to influence public opinion, policy debates, and decision-making processes. Framing bias can shape public perceptions of policy proposals, priorities, and solutions by framing issues in terms of benefits, risks, values, or ideological perspectives. Framing can affect policymakers’ attitudes and decisions, as well as public support or opposition to policy initiatives. By understanding framing effects in public policy, interventions can enhance transparency, promote informed discourse, and foster inclusive policy development processes. Strategies such as stakeholder engagement, framing workshops, and policy framing analyses can help policymakers and advocates navigate framing biases and communicate policy proposals effectively to diverse audiences while minimizing potential biases in decision-making.Promoting informed discourse and inclusive policy development in public policy debates, legislative processes, or advocacy campaigns where organizations aim to promote evidence-based policymaking and public engagement, in implementing interventions or workshops that provide stakeholder engagement and policy framing analyses to navigate framing biases, in adopting strategies or approaches that foster transparency and inclusive decision-making processes through framing effects in public policy principles and practices.
Framing Effects in Media CoverageFraming Effects in Media Coverage: Framing effects in media coverage refer to the ways in which news stories, narratives, and images are framed to shape public perceptions of events, issues, and actors. Framing bias can influence media representations by emphasizing certain aspects of a story while downplaying or omitting others, leading to biased or distorted portrayals of reality. Media framing can influence public opinion, attitudes, and behaviors, as well as policy agendas and social discourse. By understanding framing effects in media coverage, interventions can promote media literacy, critical thinking, and responsible journalism practices to mitigate bias and promote balanced and accurate reporting. Strategies such as media literacy education, fact-checking initiatives, and ethical journalism guidelines can empower audiences to recognize framing biases and demand more objective and transparent media coverage that reflects diverse perspectives and realities.Promoting media literacy and responsible journalism in news reporting, media literacy programs, or journalism education where organizations aim to promote ethical standards and critical thinking skills, in implementing interventions or campaigns that provide media literacy education and fact-checking initiatives to mitigate framing biases, in adopting strategies or approaches that foster transparency and diverse representation through framing effects in media coverage principles and practices.
Framing Effects in Health CommunicationFraming Effects in Health Communication: Framing effects in health communication refer to the ways in which health messages, campaigns, and interventions are framed to influence individuals’ perceptions, beliefs, and behaviors related to health and well-being. Framing bias can impact health communication by framing health issues in terms of risks, benefits, or behavioral norms, shaping individuals’ attitudes and intentions towards health-related behaviors. Health communication strategies can leverage framing effects to promote positive health outcomes, encourage preventive behaviors, and address public health challenges. By understanding framing effects in health communication, interventions can optimize message framing, tailor interventions to target audiences, and mitigate potential biases in health decision-making. Strategies such as social marketing campaigns, message framing experiments, and health literacy initiatives can empower individuals to make informed choices and adopt healthier behaviors while minimizing framing biases in health communication.Promoting informed health decision-making and behavior change in health promotion campaigns, public health interventions, or patient education programs where organizations aim to promote health literacy and preventive behaviors, in implementing interventions or experiments that use message framing and social marketing to optimize health communication strategies, in adopting strategies or approaches that leverage cultural competence and tailor messages to diverse audiences through framing effects in health communication principles and practices.
Framing Effects in Legal ProceedingsFraming Effects in Legal Proceedings: Framing effects in legal proceedings refer to the ways in which legal arguments, evidence, and narratives are framed to influence jurors’ perceptions, judgments, and decisions in court cases. Framing bias can affect legal outcomes by framing legal issues in terms of rights, obligations, responsibilities, or moral values, shaping jurors’ interpretations of evidence and legal principles. Legal advocates use framing strategies to construct persuasive narratives and influence jurors’ attitudes and biases. By understanding framing effects in legal proceedings, interventions can promote fair trials, impartial judgments, and equitable outcomes in the legal system. Strategies such as jury instructions, expert testimony, and legal framing analyses can help mitigate framing biases and ensure that legal proceedings uphold principles of justice, fairness, and due process.Ensuring fair trials and impartial judgments in legal proceedings, jury deliberations, or courtroom advocacy where organizations aim to promote justice and due process, in implementing interventions or workshops that provide jury instructions and legal framing analyses to mitigate framing biases, in adopting strategies or approaches that facilitate expert testimony and promote legal ethics through framing effects in legal proceedings principles and practices.
Framing Effects in EducationFraming Effects in Education: Framing effects in education refer to the ways in which educational messages, curricula, and instructional materials are framed to influence students’ learning experiences, attitudes, and behaviors. Framing bias can impact education by framing academic content in terms of relevance, competence, or values, shaping students’ motivation, engagement, and academic performance. Educational framing can influence students’ perceptions of themselves as learners, as well as their aspirations and career choices. By understanding framing effects in education, interventions can optimize instructional design, create inclusive learning environments, and promote student success and well-being. Strategies such as growth mindset interventions, culturally responsive teaching, and inclusive pedagogies can empower students to overcome framing biases and realize their full potential in educational settings.Promoting student success and inclusive learning environments in educational settings, curriculum development, or teacher training where organizations aim to enhance learning outcomes and student well-being, in implementing interventions or programs that provide growth mindset interventions and culturally responsive teaching to mitigate framing biases, in adopting strategies or approaches that foster inclusive pedagogies and promote student engagement through framing effects in education principles and practices.

Connected Thinking Frameworks

Convergent vs. Divergent Thinking

convergent-vs-divergent-thinking
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.

Critical Thinking

critical-thinking
Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Dunning-Kruger Effect

dunning-kruger-effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Lindy Effect

lindy-effect
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.

Antifragility

antifragility
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).

Systems Thinking

systems-thinking
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.

Vertical Thinking

vertical-thinking
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.

Maslow’s Hammer

einstellung-effect
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).

Peter Principle

peter-principle
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.

Straw Man Fallacy

straw-man-fallacy
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.

Streisand Effect

streisand-effect
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.

Heuristic

heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Recognition Heuristic

recognition-heuristic
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.

Representativeness Heuristic

representativeness-heuristic
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.

Take-The-Best Heuristic

take-the-best-heuristic
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.

Bundling Bias

bundling-bias
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.

Barnum Effect

barnum-effect
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.

First-Principles Thinking

first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Ladder Of Inference

ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.

Goodhart’s Law

goodharts-law
Goodhart’s Law is named after British monetary policy theorist and economist Charles Goodhart. Speaking at a conference in Sydney in 1975, Goodhart said that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.

Six Thinking Hats Model

six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.

Mandela Effect

mandela-effect
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

crowding-out-effect
The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

bandwagon-effect
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.

Moore’s Law

moores-law
Moore’s law states that the number of transistors on a microchip doubles approximately every two years. This observation was made by Intel co-founder Gordon Moore in 1965 and it become a guiding principle for the semiconductor industry and has had far-reaching implications for technology as a whole.

Disruptive Innovation

disruptive-innovation
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Value Migration

value-migration
Value migration was first described by author Adrian Slywotzky in his 1996 book Value Migration – How to Think Several Moves Ahead of the Competition. Value migration is the transferal of value-creating forces from outdated business models to something better able to satisfy consumer demands.

Bye-Now Effect

bye-now-effect
The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.

Groupthink

groupthink
Groupthink occurs when well-intentioned individuals make non-optimal or irrational decisions based on a belief that dissent is impossible or on a motivation to conform. Groupthink occurs when members of a group reach a consensus without critical reasoning or evaluation of the alternatives and their consequences.

Stereotyping

stereotyping
A stereotype is a fixed and over-generalized belief about a particular group or class of people. These beliefs are based on the false assumption that certain characteristics are common to every individual residing in that group. Many stereotypes have a long and sometimes controversial history and are a direct consequence of various political, social, or economic events. Stereotyping is the process of making assumptions about a person or group of people based on various attributes, including gender, race, religion, or physical traits.

Murphy’s Law

murphys-law
Murphy’s Law states that if anything can go wrong, it will go wrong. Murphy’s Law was named after aerospace engineer Edward A. Murphy. During his time working at Edwards Air Force Base in 1949, Murphy cursed a technician who had improperly wired an electrical component and said, “If there is any way to do it wrong, he’ll find it.”

Law of Unintended Consequences

law-of-unintended-consequences
The law of unintended consequences was first mentioned by British philosopher John Locke when writing to parliament about the unintended effects of interest rate rises. However, it was popularized in 1936 by American sociologist Robert K. Merton who looked at unexpected, unanticipated, and unintended consequences and their impact on society.

Fundamental Attribution Error

fundamental-attribution-error
Fundamental attribution error is a bias people display when judging the behavior of others. The tendency is to over-emphasize personal characteristics and under-emphasize environmental and situational factors.

Outcome Bias

outcome-bias
Outcome bias describes a tendency to evaluate a decision based on its outcome and not on the process by which the decision was reached. In other words, the quality of a decision is only determined once the outcome is known. Outcome bias occurs when a decision is based on the outcome of previous events without regard for how those events developed.

Hindsight Bias

hindsight-bias
Hindsight bias is the tendency for people to perceive past events as more predictable than they actually were. The result of a presidential election, for example, seems more obvious when the winner is announced. The same can also be said for the avid sports fan who predicted the correct outcome of a match regardless of whether their team won or lost. Hindsight bias, therefore, is the tendency for an individual to convince themselves that they accurately predicted an event before it happened.

Read Next: BiasesBounded RationalityMandela EffectDunning-Kruger EffectLindy EffectCrowding Out EffectBandwagon Effect.

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