4 traps that lead to bad decisions

As humans, we constantly fight to make objective decisions. We are impulsive, prone to distractions and highly emotional. The only way to overcome our natural dispositions to irrelevant bias, is to practice self-awareness.


In an increasingly high speed, rapid information society, we are under pressure to make on-the-spot decisions, be reactive to change and wow audiences with unwavering confidence in the face of external stressors. All of these things combined just reduce our chances, even more, of making good decisions when it matters most.

The key to avoiding bad decision making, in our snap decision society, is to understand where danger is lurking in the form of traps. Making good decisions is as much about percieving irrelevant facts, as it as about evaluating the relevant options.

The following are four traps and influential biases that you should be aware of to avoid bad decision making.

  1. Overconfidence and Decisions

Been on a lucky streak recently? Be careful. We have an innate disposition to be overconfident in our judgments, especially if we think we have made all the right decisions, so far. Numerous studies show us that our levels of confidence consistently exceed our accuracy.

To avoid this:

  • Examine contradictory information
  • Never discount data in place of our assumptions
  • Be objective about your knowledge on the subject
  1. Anchoring and Decisions

An anchor is any aspect of the environment that has no direct relevance to a decision but that nonetheless affects people’s judgments. Once an idea or a value is firmly anchored in someone’s mind it can lead to automatic decisions and behaviors.

Even more concerning is that anchors are most often formed from something as simple as “first impressions”. Quite simply if we see something first, we believe it is more important than any following facts. For example, a jury anchors on a  first sentencing option; a negotiator anchors on the opposition’s first offer; a sales manager anchors on last year’s numbers.

To avoid this;

  • Understand anchoring is almost inevitable as a starting point
  • Always use varied starting points so you’re less focused on the most recent/first fact
  • Avoid impulsive/rapid decisions
  • Be aware of anchoring language that may inadvertedly cause you to be persuaded by an irrelevant fact
  1. Confirmation bias and Decisions

This is when we become to attached to our opinions, instincts, and points of view and try as hard as we can to find evidence that supports them.

In Harvard Business Reviews’ The Hidden Traps in Decision Making, the authors write, “The confirming-evidence bias not only affects where we go to collect evidence but also how we interpret the evidence we do receive.”

How to avoid this trap?

  • Review all facts and evidence carefully, if there is more data aligning with your interests ensure this hasn’t been subconsciously coveted by you
  • Embrace the devils advocate to present counter arguments
  • Be self aware of when you are looking for a short cut? Don’t mistake assumptions for facts.
  1. Sunk Cost Trap and Decisions

This is the inability to admit that an idea or decision was wrong so, you keep throwing money at it, hoping that it will work out like you predicted. Whilst this seems like an obvious trap, you would be surprised at just how many people do this (without being aware).

To avoid this trap

  • Realise when your driven by ego instead of accuracy
  • Remove yourself and your emotions from the initial decision, is it still a good one?
  • Allow yourself to make mistakes and even better embrace them, learning from mistakes is crucial for entrepreneurs



Author: Leila Mezoughi

Leila is PCA’s Head Editor and Researcher. She holds a 1st class Law with Business degree and became a published author at 25. Former crime investigator turned business journalist. On a mission to show businesses that presenteeism is a thing of the past. Everything seems impossible until it’s done. Typically found working from a white beach in South-East Asia embracing rapidly changing technology.

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4 traps that lead to bad decisions - PCA LAW