Imagine the following sequence of numbers follows a rule, and that your task is to diagnose that rule. When you write down other sequences of three numbers, your instructor will tell you whether or not your sequences follow the rule.
2-4-6
What sequences would you write down?
Commonly guessed patterns include "numbers go up by two" and "the difference between the first two two numbers equals the difference between the last two numbers". In fact, the rule was much broader: "any three ascending numbers". But people had only tried sequences that tested their hypothesis by accumulating evidence that confirmed it, but didn't test for wider rules. They fell into the confirmation trap by just seeking to confirm their suspicions by trying sequences like 1-3-5 and 22-24-26 instead of trying, for example, 1-2-3 or 1-2-10.
This is called the confirmation bias. In all walks of life, from politics to business, people seek to confirm their beliefs rather than really test them.
People ask "May I believe it?" rather than "Must I believe it?"
Can you provide us with an example from the field of economics?
ReplyDeleteSure - the confirmation bias pervades the decision making process, particularly in the evidence seeking stage. For example, in large decisions where evidence is important (ie buying a car) a consumer will often pay more attention to information supporting their initial beliefs rather than performing a neutral search of the evidence. Say I am looking for a new car and have narrowed it down to two models, I have already decided which one I prefer when I see a newspaper article reviewing both cars. It ranks one better on fuel efficiency and one better on price. I will pay more attention to the aspect that confirms my decision.
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