The hidden shortcuts of the mind: understanding cognitive biases
- Ilinca Pantis
- 10 hours ago
- 6 min read
We like to think about ourselves as rational beings who process all information before making a judgement, but this is often not the case. Every day, we make thousands of decisions - about what to buy, how to spend our time, who to vote - often in a fraction of a second.
To handle the constant stream of information that comes our way, our brains rely on shortcuts known as heuristics. These mental simplifications save energy and time, and have helped us survive so far, but in the modern world they can lead us astray.
In this article, we explore some of the most important, well-documented cognitive biases: confirmation bias, anchoring bias, framing effect, loss aversion, endowment effect, and sunk cost fallacy. Each of these illustrates a different way in which our intuitive mental shortcuts shape perception, evaluation, and decision-making.
Beyond defining these biases, we examine how they manifest in real-life contexts, from day-to-day consumption behaviour to complex career, relationship and financial choices.
By connecting psychological mechanisms to their broader social and economic implications, we aim to show that being aware of cognitive biases and understanding them is an important step towards making informed and sound decisions in an increasingly complex world.
Confirmation bias
It would be extremely resource-consuming for the brain to constantly re-evaluate every single belief. That’s why we tend to find, interpret, and recall information that is consistent with what we already consider to be true.
The dorsomedial prefrontal cortex , responsible for self-referential thinking decreases activity when presented with contradictory evidence, meaning that the brain selectively ignores it to maintain consistency.
Confirmation bias is the psychological basis for many of our ways of categorising people and events: like stereotypes, superstitions, and even astrology. For example, if you know that Leos tend to be extroverted, passionate people who love to be the centre of attention, when you think about the Leos you know, you will recall more the occasions in which they acted consistent with these characteristics, and you will see this as proof that the description is correct.
If believing certain things about people based on what their star sign is seems harmless, let’s look at another perception where confirmation bias comes into play: whether we think about ourselves as lucky or not. This perception about our luck is the result of all the evidence we’ve gathered throughout our lives. Clearly, both good and bad things have happened to all of us, but depending on what we believe, we tend to see some events stand out as “proof” more than others.
Confirmation bias works both ways in this case, so it’s better to use it to your advantage instead of letting it fuel the vicious cycle in which you perceive your condition as unfavourable, seeing more the evidence that points in this direction, and having this belief reinforced.
Anchoring bias
The first piece of information we receive about a certain aspect becomes a reference point against which we compare all subsequent information.
The brain uses anchoring as a shortcut, particularly through a process called “selective accessibility”. When an anchor is presented, the brain primes itself by activating knowledge consistent with that anchor, making it easier to recall and use that specific information, while ignoring conflicting data.
For example, when we browse in store through the sales section, and we see an item listed at €100 but then discounted at €60. We first evaluate the item as worth €100, against which €60 seems like a bargain, so we’re very likely to purchase it. If we had seen the item listed at €60 initially, we might not have been so eager to buy it.
Besides making us splurge more than we normally would, anchoring bias affects more important financial decisions that we make, such as buying a house or a car, or negotiating a salary. In this cases, having an erroneous initial information can do even more harm.
Being aware of the first information we are exposed to, and questioning its validity, can help counteract the anchoring bias.
Framing effect
Our tendency to evaluate equivalent information based on how it is presented to us.
Between two options where the underlying facts are the same, we tend to favour that which highlights a positive attribute.
From a neurological standpoint, the framing effect is driven by a tension between emotional processing in the amygdala and cognitive control in the prefrontal cortex. The amygdala, the part of the brain responsible for emotion processing, shows increased activity during negative framing, triggering fear-based behaviour, while the prefrontal cortex is involved in processing information and engaging in rational analysis.
Let’s say you’re searching for low-fat yogurt, and you come across two products, one labeled: “95% fat-free”, and the other “5% fat”. After comparing the two, you would probably choose the one claiming “95% fat-free”. Even though both products are essentially claiming the same thing, we are more attracted towards the one that emphasises the positive attribute.
Being aware of the framing effect helps us pay attention to the objective information, not to its interpretation.
Loss aversion
The pain of losing something we have feels twice as strong as the joy of gaining something we don’t have. Losing €100 hurts more than gaining €100 feels good.
Functional MRI studies show that losses cause stronger activation in the amygdala, the brain region central to emotion processing, especially fear and anxiety, which triggers a fear based, risk-averse response.
Think about companies like Amazon or Glovo, that want to incentivise their users to sign up to their premium tier. By showing users how much money they lost, or how much they would have saved with the premium tier, these companies are triggering loss aversion,and the incentive to upgrade is stronger than if the amount of money were phrased as a gain.
Loss aversion lies at the foundation of other two important heuristics: endowment effect and sunk cost bias.
Endowment effect
Once we own something, we attribute greater value to it simply because it’s ours.
Because the psychological pain of losing an object is greater than the pleasure of acquiring it, we attribute higher value to our possessions.
Three brain regions are primarily involved in the endowment effect. The insula is activated, associated with anticipation of pain and loss: parting with a possession is processed similarly to a physical or financial loss. The nucleus accumbens is associated with reward anticipation. It shows increased activity for preferred products when buying or selling, indicating that may focus on the emotional attachment or “pleasure” of owning the item, reinforcing the unwillingness to part with it.
Companies leverage this bias by offering free trials, money back guarantees, or customisation, to foster a sense of ownership, making consumers less likely to return the item.
Sunk cost fallacy
When we’ve invested time, money, and effort into something, we struggle to abandon it, even if it’s failing.
The dopamine release in the striatum (a brain region involved in motivation and reward) increases with the amount of effort put into a task, causing individuals to value that reward more highly. The dorsolateral prefrontal cortex, involved in high-level cognitive control and following social rules (such as “don’t waste”), reinforces the rule that previous investments should be honoured. The insula, involved in emotional processing, including guilt or fear, also plays a role in the “don’t waste” rule, reinforcing susceptibility to the fallacy.
Let’s say you’ve paid €15 euros to go to a movie, and halfway through it, you realise you don’t enjoy it at all. Most likely, you’re still going to sit through to the end, because you’ve already paid for it, even though the money is gone regardless of how you’re going to spend your time from that point on.
Sunk cost fallacy tampers with our judgement even in the most important areas of our lives. Imagine someone who has spent years studying medicine, law, or engineering. They’ve invested time, money, and effort into becoming a professional in that field, but once they begin working, they realise they are deeply unhappy. Most likely, they are thinking: “I can’t quit now, all those years would be a waste”, or “I’ve sacrificed too much to change paths now”.
Someone might remain in an unhappy relationship because “We’ve been together for 5 years, I can’t throw all that time away”, or “We’ve build so much together”.
Sunk cost bias is very hard to overcome, but it’s helpful to recognise that the resources invested cannot be recovered no matter what happens next, and our future wellbeing doesn’t need to be tied to our past decisions.Cognitive biases are not glitches in the system, but features of a brain designed for speed, efficiency, and survival. In a world where decisions involve abstract possibilities, long-term consequences, and massive information flows, the shortcuts that once protected us can mislead us.
We may never eliminate cognitive biases entirely, they are deeply wired into how we think. But being aware of them creates the possibility to pause, reflect, and make better judgements.
Bibliography
online-exhibition/the-science-of-bias https://thedecisionlab.com/biases/framing-effect
aversion/
biases/anchoring-bias https://www.jneurosci.org/content/33/47/18641 https://
5306866_Neural_Antecedents_of_the_Endowment_Effect http://news.stanford.edu/
stories/2026/01/sunk-cost-effect-study-science-neuroscience
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