Generali SpA

    premises & global services

    07 September 2017 - 11:31

    Invisible biases

    How to recognise bias and neutralize them

    Biases are unconscious forms of prejudice that disregard the facts. There are many forms of bias and they are almost always involuntary. Nevertheless, they condition our opinions, our decisions and even those of public institutions.

    Finding comfort in agreeing with those who think like we do, believing that our group is better than others, or even feeling that your view of the world corresponds to that held by most people. These are some of the many forms of cognitive bias (as it is called in psychology) that condition our behaviour, our decisions and even those of public institutions. In other words, often our choices and opinions are based not on critical and objective judgements, but on ideas that we do not wish to verify.

    Many types of bias exist. Business Insider has compiled a list of twenty of the most common: Some have curious names. There’s the anchoring bias, for example, when people are over-reliant on the first piece of information that they hear. Another form of bias is the so-called “ostrich effect”, which refers to when we metaphorically bury our heads in the sand in order to avoid seeing or hearing information that we don’t like.

    There is also conservatism bias, when older information is valued more than the new information that emerges (e.g. when people struggled to understand that the world was round because they had always believed it to be flat). The bias of the “availability heuristic” is when we tend to make judgements based on the partial information available to us. Then there is the famous “bandwagon effect”, according to which the probability that someone will believe something increases with the number of people that already believe it.

    In the English-speaking world, where the principle of the separation of facts from opinions is sacred, there has been much reflection on the relationship between bias and information. British press agency Reuters, for example, has published guidelines in order to “free” its own journalists from bias. On the contrary, others believe that that the aim of press impartiality is impossible and that, put simply, what journalists write or say frequently reflects whatever their readers want to read or hear. In fact, the publishing market is based precisely on this premise.

    But there is also much talk of bias in economics, a discipline that in theory is based largely on facts, numbers and percentages. Noah Smith, a columnist for Bloomberg and former assistant professor of finance, has pointed out that economists too  are influenced by their biases. “If you think that those with less should not receive higher wages, it is likely that your research will arrive at the conclusion that the rules concerning the minimum wage cause high unemployment. If, on the contrary, you believe that it is fair to tax the rich and redistribute the proceeds to those with less, there is a temptation to include in the research only results that suggest this.” It also happens that some may exploit our biases in order to encourage us to make specific decisions, for instance in marketing.

    Another example is that of “implicit bias”. This was recently the subject of a piece in the Financial Times, which lead with the news about the disparity in earnings at the BBC, where female presenters earn substantially less than their male colleagues and white broadcasters more than those from ethnic minorities. According to the FT, the problem, which does not only concern the British public broadcaster, is hidden in these implicit biases, unconscious prejudices of well-meaning people whose decisions, in practice, make them act in a discriminatory way. Some have called this “racism without racists”.

    The article cites two studies conducted in the United States. In the first, a number of bogus CVs were sent in application for a job, half of the CVs had a male name, the other half had a female name. The fake candidates with male names turned out to be considered more employable. The other study was promoted by the University of Stanford, which posted a website announcement of an iPod for sale. In the related photos some showed the device held by a white hand, others in a black one. In the latter case, the announcements received significantly fewer responses and fewer offers.

    How can we try to neutralize the influence of biases? According to Noah Smith, “If your research highlights that tax is bad for the economy, report these results and clarify that, in any case, you believe that the rich should be taxed anyway.” In other words: stay true to your convictions but make them explicit and try to inform your judgement in order to be more critical.

    It may seem simple, but it is necessary to make a significant effort in order to do this. “The Data Doc”, Thomas Redman, a highly respected consultant in America and head of Bell Labs, advises us to take this step always. “Gather information that supports the opposing argument and compare it with what you have used to support your own opinion. Reconsider your choices in light of this. Your perspective may not be complete but it will certainly be more balanced,” he wrote in the Harvard Business Review.

    Redman also has some suggestions for big companies that are often forced to make complex and delicate decisions in a very short space of time. In this case Redman advises them to delegate as much as possible. Managers with severe time constraints should ask themselves whether it might be better to entrust a colleague or a member of staff that has more time available to analyse the decision.

    The essence changes little if you browse through the manual that the University of South Carolina has prepared for its students in order to help them avoid being excessively influenced by their biases. The document lists the most insidious forms and offers tangible examples of how they have influenced some trends (one case is that of subprime lending prior to the 2008 crisis). Finally it offers some tips:

    • challenge the status quo
    • seek out different perspectives
    • find more information
    • play devil’s advocate
    • reflect your points of view and your values

    Nothing extraordinary, just one part scientific method and one part good sense.