Cognitive bias refers to systematic patterns in how humans process information and make decisions, often deviating from purely rational judgment. Psychologists at the University of Michigan and Stanford University documented these phenomena extensively beginning in the 1970s.

Foundational Research

Daniel Kahneman (1934-present) and Amos Tversky (1937-1996) revolutionized decision-making studies at Hebrew University in Jerusalem. Their 1974 paper in Science introduced heuristics—mental shortcuts our brains use to simplify complex decisions. Kahneman received the Nobel Prize in Economic Sciences in 2002 for this work, though Tversky had passed away in 1996 and could not be honored posthumously.

Common Cognitive Biases

• Confirmation bias - seeking information that confirms existing beliefs
• Anchoring bias - over-relying on initial information when making judgments
• Availability heuristic - overestimating probability based on memorable examples
• Sunk cost fallacy - continuing investments based on past expenditures

Research Impact

Studies conducted at Cambridge University in 2015 found that approximately 60% of financial investment decisions were influenced by cognitive biases. Organizations worldwide now apply debiasing techniques in corporate strategy and public policy. The field continues expanding through behavioral economics research centers in locations including Berkeley, Oxford, and Singapore.

Reference:

Wikipedia reference

https://en.wikipedia.org/wiki/Cognitive_Bias