1. Understand overconfidence bias and how to avoid it.
2. Understand hindsight, anchoring, and framing bias and how to avoid them.
3. Understand escalation of commitment and how to avoid it.
Avoiding Decision-Making Traps
No matter which model you use, it is important to know and avoid the decision-making traps that exist.
Daniel Kahnemann (another Nobel Prize winner) and Amos Tversky spent decades studying how people
make decisions. They found that individuals are influenced by overconfidence bias, hindsight bias,
anchoring bias, framing bias, and escalation of commitment. An awareness of some of the pitfalls of
decision making enhances our ability to make good decisions. When we make good decisions, we are
happier, which makes for more positive human relations skills.