Humans have a tendency to think in particular ways that can lead to systematic deviations from making rational judgments.
These tendencies usually arise from:
Information processing shortcuts
The limited processing ability of the brain
Emotional and moral motivations
Distortions in storing and retrieving memories
Social influence
Cognitive biases have been studied for decades by academics in the fields of cognitive science, social psychology, and behavioral economics, but they are especially relevant in today’s information-packed world. They influence the way we think and act, and such irrational mental shortcuts can lead to all kinds of problems in entrepreneurship, investing, or management.