You may be familiar with cognitive bias from behavioral economics. But being aware of common thinking traps and how to elude them can help you in your retirement planning and in your day-to day life, including making you a wiser consumer. Dr. Woo-kyoung Ahn, a Psychology professor at Yale, is the author of the new book Thinking 101: How to Reason Better to Live Better. She joins us for an enlightening conversation about how we can be more keenly aware of our cognitive tendencies, sharpen our thinking and duck thinking errors that can have real-life implications.

We discuss:

How confirmation bias works - and how it gets in our way
Negativity bias - and why loss aversion carries more weight than gains do
Overconfidence and the fluency effect
Estimating better and the planning fallacy
How marketers use cognitive bias - and how to be a wiser consumer
Applications of the research in daily life
How cognitive psychology can help at the individual and societal levels

Dr. Ahn joins us from New Haven.

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Bio




Woo-kyoung Ahn is the John Hay Whitney Professor of Psychology at Yale University. After receiving her PhD in Psychology from the University of Illinois, Urbana-Champaign, she was Assistant Professor at Yale University and Associate Professor at Vanderbilt University. Her research on thinking biases has been funded by NIH. She is a fellow of the American Psychological Association and the Association for Psychological Science.




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For More on Dr. Woo-kyoung Ahn

Thinking 101: How to Reason Better to Live Better

Website

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Mentioned in This Episode

BTS Music Video (The dance sequence Dr. Ahn uses in her class is from 1:18 to 1:24. )

(Video of my attempt to do this is currently unavailable...)

Breaking the Age Code – Dr. Becca Levy

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Podcast Episodes You May Like

Chatter & Your Inner Voice – Ethan Kross

Think Big – Dr. Grace Lordan

The Expectation Effect – David Robson

Smarter Tomorrow – Elizabeth Ricker

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How to Win the Retirement Game

(It Might Just Be the Most Important Game of Your Life)

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Wise Quotes

On Estimating & Planning Better



"...what I do to overcome the planning fallacy in myself is I just basically add 50% of the time that I initially estimate. And I try not to negotiate with myself on this. And sometimes 50% was not enough. My favorite story was I was planning I was preparing for a lecture on the planning fallacy, and I thought It'll be done within four days. And I said, Okay, that means a week. No. It took two weeks, because there's so many studies that I read and then I said, No, this one doesn't work. No, this is not interesting. So it took two weeks. So, I think the best thing to do is just to assume the planning fallacy always happens a hundred percent - and then just double the estimate."



On Negativity Bias



"...some researchers say that we have actually evolved to be more sensitive to loss and negative information. And it's because throughout most of our human history, the resources have been really scarce. So in that case, any loss, even if it's a small one, can be a direct threat to our survival. So we have evolved to protect what we possess, what our family has.