All people have a bias blind spot, that is they invariably think that they are less biased than everyone else. In one study, at Carnegie Mellon University, only one person out of 661 said that they were as or more biased than other people. This cognitive bias leads us to see less value in the judgement of others and more in one’s own.

It seems that the human brain is wired to see biases in others but not in one self. The bias blind spot, where more pronounced, can easily lead to conflict and to ignoring the advice of others.  It tends to lead people to think well of themselves and their intentions, but to attribute another’s bias to malice.

It is very difficult, if not impossible, to understand one’s own biases. However, being aware of the bias blind spot will go some way towards understanding. It also is possible to undertake training to help recognize one’s biases.

In the investment world, the bias blind spot can lead to opportunities lost and flawed decision making. For example, it is not uncommon for investors to take a negative view of a company’s management. This leads to opportunities forgone as the investor will ignore the company, whatever its potential.

16 March 2017 Markets