Cognitive biases

One-sided bet: People commonly assume implicitly that their actions may only have good outcomes. For example, increasing the minimum wage in a country may only benefit the poor. Taking a lottery ticket only has the upside of possibly winning a lot of money. Believing in God can only have benefits. And so forth. In truth, most actions are two-sided. They have good and bad effects.

Politician’s syllogism: We must do something, this is something so we must do it. “We must fight climate change, we can tax oil, so we must tax oil.” If there is a problem, it is important to assess the actions we could take and not believe that because they are actions in response to a real problem, they are intrinsically good.

Confirmation bias: “I believe that there are extraterrestrials, I have collected 1000 reports confirming their presence” (but I am blind to all of the negative evidence). People tend to make up their mind first and then to seek to rationalize their opinion whereas they should do the opposite.

Historical pessimism bias: “Human life was so much better 2 centuries ago!” Yet by almost any measure, human beings have better lives today.

Theory of the second best: By fixing one problem, we may actually make overall welfare worse. Consider a mining monopoly that is also a polluter. If the government breaks up the monopoly, it may increase pollution. Thus to improve matters, it is necessary to look at the whole picture.

Daniel Lemire, "Cognitive biases," in Daniel Lemire's blog, December 16, 2020.