Series 2, Episode 20: So What?
Welcome back to the final episode in this, the second series of the bitesize behaviour podcast.
Over the last 19 episodes, we’ve discussed 18 behavioural biases that play their own role, in their own way, in how we make decisions. We shouldn’t be afraid to accept that we are biased. We all are. And if someone accuses you of being biased, the best response is “of course I am” and not “no I’m not”. Accepting we are biased in the way we think is the first step to really getting to the heart of who you are.
In fact, if we properly examined how we live our lives and the decisions that we have made, you would soon come to recognise that our behavioural biases are a fundamental part of who we are and, once we accept this, we can go on a journey of self-discovery - a kind of Know Thyself journey - that can result in not only better decision making, but in us becoming a more emotionally intelligence human being.
Now I hope that over the course of the last 19 episodes I’ve been clear that behavioural biases aren’t good or bad. They are just part of who we are. But they do have an impact on our views, our attitudes, and obviously, how we behave.
And everything we’ve talked about, we can split into five areas that we need to be aware of when we are navigating our way through life and it’s within these five areas that the behavioural biases we’ve discussed live.
The five areas are inconsistency, protection, social, information, and emotions.
Our inconsistency lies in the fact that we often hold two or more contradictory beliefs, ideas, or values. This can lead to what is known as cognitive dissonance. In essence, when we make a decision, or take an action that goes against one of these three things (belief, idea, value), it can create stress and anxiety in us. The best example of this is Confirmation Bias that we discussed in Episode 2 or Probability Neglect that we discussed in Episode 12.
Protection is based on the fact that we don’t like to lose what we have, and in some cases this presents us with the dilemma or difficulty to do what is right, instead opting to do what is comfortable. Loss Aversion from Episode 6, the Endowment Effect from Episode 9, and Sunk Cost Fallacy from Episode 15 all fall under this category.
The third category is social, and this is where we are all influenced, some to greater degree that others, by our social networks. Other people's views and opinions matter, and we often take this into account when reaching a decision. Herding Bias from Episode 13 is the best example of this.
We’ve learned over the course of the last 19 episodes that we all receive and process information in different ways, extracting the salient points that allow to make a decision. Framing Bias in Episode 3, Probability Neglect in Episode 12, and Attentional Bias in Episode 11, are all examples of this.
Finally the most powerful of them all - our emotions. You won’t be surprised to learn that our emotions play a major role in the decisions we make. This means that of all the biases we’ve discussed, our emotions can play their part in every single one of them.
YOU ARE YOU
These five areas all come together to make you who you are. They you make you, you.
The beauty of being a human being is that each and every one of us gets to navigate the world in our own unique way. Some of us are highly social, some of us aren’t. Some of us are really emotional, others less so. But what matters most is there is no right or wrong. There is no rational or irrational. There is no good behaviour and bad behaviour. There is just you trying your hardest to make the best decisions you possible can with the tools that mother nature, and millions of years of evolution have given you.
Our behavioural biases and our heuristics, don’t define us. But they do influence the way we behave, so we should take time to understand what’s going on in our heads, especially when we need to make big, important decisions; like those to do with money.
THE POWER OF SELF AWARENESS
Financial wellbeing is another phrase I’ve used a lot in this series and I can’t stress enough the importance of being financially well. It has a knock on effect to other parts of your wellbeing, most noticeably your health and mental wellbeing.
If we take the time to get to know ourselves more, learn about how our brain works in a world where we are bombarded with information all day everyday, in a world where fake news is more common that real news, and in a world where people’s opinions are stated as if they are facts, then we equip ourselves to make better, even great decisions - all the time.
In 1750 Benjamin Franklin, one of the founding fathers of the Unite States wrote"
"There are three Things extremely hard, Steel, a Diamond, and to know one's self.”
I obviously can’t help with two of those things, but I created this podcast series to help with the third. To help people like you first learn about what’s going on in your unconscious mind and to then, at an absolute minimum, use what you’ve learned to inform the choices you make.
Remember to pause, to reflect, to look for more information if needed, to not take information on face value, and to not let you heart rule your head. Not all the time anyway - because sometimes, your intuition, your gut feel, is bang on. Evolution has given us that super-power. That amazing gift.
TILL NEXT TIME...
But for now, I hope this series has at least opened your eyes to what’s going on in your unconscious and subconscious mind. There’s a great deal going on, and so in Series Three, we will be taking the conversation to the experts and interviewing many of the brightest people who specialise in human behaviour.
Together, in Series Three, we will continue our education together. Until then, stay safe.