Cognitive Biases That Distort Thinking

The Smartest People Make the Worst Mistakes

A team of brilliant engineers at NASA overlooked evidence that O-ring seals were dangerous in cold weather. The data was available. The warnings were raised. But multiple biases—groupthink, normalcy bias, and confirmation bias—caused the team to see what they expected instead of what the data showed. The Challenger shuttle launched and disintegrated 73 seconds later.

By the end of this lesson, you’ll recognize the most common cognitive biases and have practical techniques to counteract them before they distort your important decisions.

🔄 Quick Recall: In the previous lesson, we learned the claim evaluation framework with four key questions. Remember the “who benefits?” question? Cognitive biases are part of the reason we skip that question—our brain takes shortcuts that make us overlook inconvenient information. Today we name those shortcuts and learn to catch them.

What Are Cognitive Biases?

Cognitive biases are systematic errors in thinking. They’re not random mistakes—they’re predictable patterns that affect everyone, regardless of intelligence, education, or experience.

They evolved as mental shortcuts (heuristics) that helped our ancestors make fast decisions in dangerous environments. In a world of sabertooth tigers, “assume danger and run” was a great heuristic. In a world of complex decisions, these same shortcuts cause predictable errors.

The Big Seven Biases

1. Confirmation Bias

What it does: You seek evidence that supports your existing beliefs and ignore evidence that contradicts them.

Example: You think a new employee is incompetent. You notice every mistake they make and dismiss their successes as luck or easy tasks.

Counter: Actively seek disconfirming evidence. Ask: “What would change my mind about this?”

I believe [your belief or position].
Act as a rigorous fact-checker. Find the 3 strongest
pieces of evidence or arguments AGAINST my position.
Don't hold back—challenge me genuinely.

2. Anchoring Bias

What it does: The first piece of information you encounter disproportionately influences subsequent judgments.

Example: A house listed at $500,000 makes a $450,000 offer feel like a deal—even if the house is worth $400,000.

Counter: Generate your own estimate before seeing anyone else’s number. Ask: “What would I think this is worth if I hadn’t seen that first number?”

3. Availability Bias

What it does: You judge probability based on how easily examples come to mind, not on actual frequency.

Example: After seeing news coverage of plane crashes, you feel flying is dangerous—even though it’s statistically the safest form of travel.

Counter: Look up actual data instead of relying on memory. Ask: “Am I judging frequency by how easily I can think of examples?”

✅ Quick Check: You’ve heard three stories about people getting food poisoning at a particular restaurant. Does this mean the restaurant is unsafe? What additional information would you need?

4. Sunk Cost Fallacy

What it does: You continue investing in something because of what you’ve already spent, even when the future returns don’t justify it.

Example: You keep watching a terrible movie because you paid $15 for the ticket. You continue a failing project because you’ve spent six months on it.

Counter: Ask: “If I were starting fresh today with no prior investment, would I choose this?” If the answer is no, the sunk costs are driving a bad decision.

5. Dunning-Kruger Effect

What it does: People with low competence in a domain overestimate their ability, while experts underestimate theirs.

Example: A beginner investor feels confident picking individual stocks. A professional fund manager acknowledges how hard it is to beat the market.

Counter: Seek feedback from people with more experience. Ask: “What am I not seeing that an expert would?”

6. Status Quo Bias

What it does: You prefer the current state of affairs and resist change, even when change would be beneficial.

Example: Staying at a job you dislike because switching feels risky, even when the expected value of switching is higher.

Counter: Evaluate options as if you’re choosing from scratch. Ask: “If I were in neither situation, which would I choose?”

7. Survivorship Bias

What it does: You focus on successes that are visible and ignore failures that are invisible.

Example: “College dropouts like Bill Gates became billionaires, so dropping out is fine.” You don’t see the millions of dropouts who struggled financially.

Counter: Always ask: “What am I not seeing? Where are the failures that didn’t make the news?”

✅ Quick Check: Your company has always done performance reviews annually. Someone proposes switching to quarterly reviews. Your instinct says to keep the annual system. Which bias might be at work?

The Pre-Mortem Technique

The pre-mortem is the single most effective debiasing technique for important decisions:

I'm about to [make this decision / launch this project].

Run a pre-mortem:
Imagine it's 6 months from now and this decision
has completely failed. What went wrong?

1. List the 5 most likely reasons for failure
2. For each, identify which cognitive bias might
   have caused me to overlook it
3. Suggest a specific action I can take NOW to
   reduce each risk

The Bias Audit

Before any important decision, run a bias audit:

I'm deciding [describe the decision].
My current leaning is [what you're thinking].

Check my thinking for biases:
1. CONFIRMATION BIAS: Am I only considering evidence
   that supports this choice?
2. ANCHORING: Is my judgment influenced by a specific
   number or piece of information I saw first?
3. AVAILABILITY: Am I overweighting recent or vivid
   examples?
4. SUNK COST: Am I continuing because of past
   investment rather than future value?
5. STATUS QUO: Am I choosing this because it's
   familiar, not because it's best?
6. SURVIVORSHIP: Am I focusing on success stories
   and ignoring the failures?

For each bias detected, suggest how to adjust
my thinking.

Try It Yourself

Think of a decision you’re currently facing. Run the full bias audit using AI. Then ask yourself:

1. Which biases are most likely affecting my thinking?
2. What information am I ignoring?
3. What would I decide if I could eliminate these biases?
4. What does a pre-mortem reveal about this decision?

Write down the biases you identified. Awareness is the first step to counteracting them.

Key Takeaways

• Cognitive biases are systematic thinking errors that affect everyone, regardless of intelligence
• The Big Seven: confirmation, anchoring, availability, sunk cost, Dunning-Kruger, status quo, and survivorship
• Confirmation bias is the most dangerous—it creates self-reinforcing belief loops
• The pre-mortem technique (imagining failure, then working backward) is the most effective debiasing tool
• AI can serve as an impartial bias checker because it has no emotional stake in your decision
• Awareness of biases doesn’t automatically eliminate them—you need specific counter-techniques

Up Next

In Lesson 4: Logical Fallacies in Everyday Arguments, we’ll identify the most common reasoning errors in arguments, debates, and persuasion—so you can spot them instantly.