Confirmation Bias: Definition and Examples

Confirmation bias refers to the tendency to seek information or opinions that confirm existing beliefs. The person favors information that reaffirms their views and rejects those contradicting their beliefs.

Confirmation bias can affect various aspects of life. For instance, it can play a role in financial decision-making involving purchases and investments. Politics also shows the impact of confirmation bias.

Processing new information based on certain biases comes with disadvantages. It tends to limit a person’s perception in an echo chamber, making it difficult to view things from a different perspective.

Understanding confirmation bias and how you can overcome it can help you make more rational decisions.

A person’s experiences and observations help shape their beliefs, which can affect how they perceive things. This is also how biases are created.

People exhibiting confirmation bias may display certain traits. For instance, they tend to selectively seek out information based on their existing views. They can overvalue claims supporting their beliefs and disregard contradictory evidence, often refusing to listen to the opposing side.

There are also cases wherein the manifestation of confirmation bias is subtle. Such is the case for memories. Some people may recall data or events differently. They remember incidents in a way that supports what they already believe.

For personal and emotionally-charged issues, the effects of this phenomenon are stronger. That’s especially true for deeply entrenched beliefs.

Financial decisions may also be affected by confirmation bias. This is something that’s explored in behavioral finance, which studies the relationship between individual psychology and financial choices. For example, investors influenced by confirmation bias analyze the companies they’ve already invested in and interpret information confirming their beliefs. They may even ignore negative news.

Some people may confuse confirmation bias with anchoring bias. While both refer to the role of biases in evaluating situations and decisions, anchoring bias refers to the tendency to rely on the first piece of information encountered and not on existing beliefs.

In certain situations, confirmation bias may be viewed positively. For some people, having information that proves their ideas right can alleviate stress and boost self-esteem. It can also be used to promote good ideas among groups of people that share the same viewpoints.

Most people aren’t consciously making biased decisions. Confirmation bias is typically done subconsciously. The best way to avoid it is to become more aware. Understand all aspects and seek information from different sources.

There are different types of confirmation bias. These can be divided into three categories — bias in research, interpretation and memory recall. Each area focuses on a particular aspect of processing information or data.

The table below breaks down these categories of confirmation bias to help you better understand how this phenomenon manifests.

Confirmation bias can affect how a person views various aspects of life, including politics, religion and day-to-day decisions like buying car insurance. Issues can arise when their biases prevent them from changing their perspective even when presented with facts and evidence.

Here are some real-world examples:

Overcoming confirmation bias can help you make more rational decisions. While this may be challenging, it’s possible.

It’s important to remember that exhibiting confirmation bias is often not due to a conscious effort. That means awareness is key. You have to be more observant when making decisions. Look at other points of view and listen to opposing arguments. Being open to various information channels can also help.

Here are some tips to help you get started:

Tip 1

Acknowledge Confirmation Bias

The first thing you need to do is assess yourself. As a human being, accept that you tend to exhibit confirmation bias. For instance, when making financial decisions, determine if past financial traumas are preventing you from achieving financial stability.

Tip 2

Look At Other Points of View

Consider looking at things differently. Explore new ideas. Ask someone with a contradictory opinion to share their insights. While this may make you uncomfortable at first, it allows you to understand the reason behind their opinion.

Tip 3

Do Your Research

Hearing what other people have to say can help you form opinions. However, it’s best not to rely solely on them. Check the facts yourself. Weigh all sides before drawing a conclusion. For instance, if someone you look up to says that investing in a certain stock will help you succeed, you shouldn’t immediately follow their advice without verifying the reliability of their information.

Tip 4

Be Open to Various Information Channels

Relying on one source of information prevents you from looking at things rationally. When conducting research, use different sources of information. Visit multiple websites, check news articles and watch shows you used to avoid. Interpret information with an open mind.

Tip 5

Ask Questions

It helps to question the information that comes your way. Don’t simply accept them as facts. When asking questions, avoid those that lean towards answers you expect. For instance, instead of asking why a person believes something, you should ask them to share what led them to that conclusion.

Knowing what confirmation bias is and how it works can help you better understand what factors may affect your decisions. Below are some of the questions people usually ask about confirmation bias.

Confirmation bias is only one of the factors that can affect a person’s way of viewing things and making decisions. Below is a list of resources that can help you make well-informed financial decisions.

• Herd Instinct: Behavioral finance tackles the relationship between a person’s psychology and their finances. Find out what herd instinct is and how it affects people’s views.
• How Debt Can Harm Your Health: Debt and financial stress can affect your physical and mental health, influencing your finances. Get tips on how to cope with debt stress.
• How You Can Hold Yourself Accountable with Your Money: Putting money management concepts into practice can be difficult. Find out how you can achieve your financial goals and stay accountable with your money.
• Mental Accounting: People may be influenced by how they perceive items when categorizing money. Learn about this concept, its impact on investment decisions and how you can avoid mental accounting bias.
• Recovering From a Shopping Addiction: Although enjoyable, shopping can also become an addiction. Learn the signs of a shopping addiction, its effects and how to recover from it.
• The Psychology of “Treat Yourself”: Treating yourself can be an issue if it breaks the bank. Understand the psychology behind it and find ways to manage splurges.