A Catalog of Cognitive Biases

This catalog of cognitive biases is part of SCARS continuing commitment to helping the victims of scams (financial fraud) to better understand the psychology of scams. In other words, why are victims vulnerable?

[WE WILL UPDATE THIS CATALOG AS NEW BIASES ARE ENCOUNTERED]

How Do Cognitive Biases Make People Vulnerable To Scams, Fraud, and Deception

How do cognitive biases play a role in making people vulnerable and susceptible to scams, fraud, and deception?

Cognitive biases are mental shortcuts that allow people to make quick decisions and judgments based on their past experiences and memories. These biases can be helpful in many situations, as they allow people to process large amounts of information quickly and efficiently. However, they can also make people vulnerable to scams, fraud, and deception.

One reason why cognitive biases make people vulnerable to scams is that they can lead people to make judgments that are not based on evidence or logical reasoning. For example, Confirmation Bias (a major bias that makes people vulnerable) is the tendency to seek out and interpret information that supports one’s preexisting beliefs, while ignoring or dismissing information that contradicts them. This can make people more susceptible to scams that appeal to their beliefs or biases, as they are more likely to believe the scammer’s claims without critically evaluating the evidence.

There are several ways that people can protect themselves from scams, fraud, and deception. One way is to be aware of common cognitive biases and how they can affect decision-making. This can help people to be more mindful of their thought processes and to question their own judgments.

Another way to protect oneself is to be skeptical of claims and offers that seem too good to be true. It is important to carefully evaluate the evidence and to ask questions before making a decision. This can help people to avoid falling for scams that rely on emotional appeals or incomplete information.

It can also be helpful to seek out additional sources of information and to consult with trusted friends, family members, or professionals before making a decision. This can provide a more balanced perspective and help to identify any potential red flags.

Overall, cognitive biases can make people vulnerable to scams, fraud, and deception by leading them to make judgments that are not based on evidence or logical reasoning, and by causing them to make irrational or risky decisions. However, by being aware of these biases and taking steps to protect oneself, people can reduce their risk of falling victim to these types of scams.

The List Of Cognitive Biases That We Have Cataloged

• Actor-Observer Bias: Attributing one’s own behavior to external factors, while attributing others’ behavior to internal factors.
• AI (Artificial Intelligence) Fallacy Bias: When you start believing that everything you see was created by ChatGPT or another generative AI, when there is no actual evidence that it was.
• Ambiguity aversion: This is the tendency to prefer clear-cut choices over ambiguous ones. For example, we might be more likely to choose a sure thing, even if it is a smaller reward than to choose a riskier option with the potential for a larger reward.
• ♦ Anchoring (Anchor) Bias: This is the tendency to rely too heavily on the first piece of information we receive when making a decision. For example, if we hear that a car accident has just happened on our way home from work, we might be more likely to drive carefully for the rest of the night, even if the accident was not in our area.
• Anchoring and Adjustment: The tendency to rely too heavily on an initial piece of information (the anchor) when making judgments or estimates, and insufficiently adjusting from that anchor as new information becomes available.
• Attribution bias: This is the tendency to attribute our own successes to our own abilities and our failures to external factors. For example, we might think that we won a game of tennis because we are a good player, but we might think that we lost a game of tennis because the other player was lucky.
• Authority Bias: The tendency to attribute greater credibility or accuracy to perceived authorities or experts.
• Attentional Bias: The tendency to pay more attention to certain stimuli while ignoring others, often influenced by personal interests or emotions.
• Availability Cascade: The self-reinforcing process where a belief or idea becomes more widely accepted and influential simply because it receives more attention and exposure.
• ♦ Availability Heuristic Bias: This is the tendency to judge the likelihood of something based on how easily examples come to mind. For example, we might think that plane crashes are more common than they actually are because we are more likely to remember news stories about plane crashes than news stories about other types of accidents.
• The Baader-Meinhof Phenomenon: Also known as frequency illusion, this bias occurs when individuals notice something for the first time, and then suddenly, they seem to encounter it everywhere. It is the result of heightened awareness rather than an actual increase in frequency.
• Base Rate Fallacy: Ignoring statistical or general information (base rates) in favor of specific information or anecdotes when making judgments or decisions.
• Bandwagon effect: This is the tendency to do something because other people are doing it. For example, we might buy a new product because everyone else is buying it, even though we do not really need it.
• Belief Perseverance: This is the tendency to cling to our beliefs even in the face of contradictory evidence. For example, we might continue to believe that a particular investment is a good idea even after the investment has lost money.
• Bias Blind Spot: This is the tendency to believe that we are less biased than other people. For example, we might think that we are good at judging people fairly, even though we are actually biased in our own way.
• Choice-supportive Bias: This is the tendency to remember our choices more favorably than they actually were. For example, we might remember choosing a particular product because we thought it was the best option, even though we were actually influenced by other factors, such as the salesperson’s recommendation.
• Clustering Illusion: Seeing patterns or clustering in random data or events even when no real pattern exists.
• ♦ Confirmation Bias: This is the tendency to seek out information that confirms our existing beliefs and ignore information that contradicts them. For example, if we believe that we are good drivers, we might be more likely to pay attention to news stories about people who were injured in car accidents while texting, and less likely to pay attention to news stories about people who were injured in car accidents while not texting.
• Conservatism bias: This is the tendency to resist change, even when there is evidence that change is necessary. For example, we might continue to use the same software program even though there is a newer, better program available.
• Contrast Effect: This is the tendency to judge something based on how it compares to other things. For example, we might think that a new car is a good deal if it is less expensive than other cars on the market, even if it is actually overpriced.
• Crime Victim’s Bias – see Victim’s Bias
• Curse of knowledge: This is the tendency for people who know something to overestimate how easy it is for others to know the same thing. For example, a software engineer might think that it is easy to understand how to use a new piece of software, even though it might be difficult for someone who is not a software engineer to understand.
• Danger of the Single Story: This is the tendency to focus on one story or perspective and ignore other stories or perspectives. For example, we might read a news story about a terrorist attack and come away with the impression that terrorism is a major problem, even though it is actually a relatively rare event.
• Decision Fatigue: This is the tendency for our decision-making abilities to decline after we have made a number of decisions. For example, we might be more likely to make impulsive or irrational decisions if we have been making a lot of decisions in a short period of time.
• Decoy Effect: This is the tendency to choose a less-preferred option when it is presented as a decoy. For example, we might be more likely to choose a $500 phone if it is presented as the only option, but we might be more likely to choose a $400 phone if it is presented as one of two options, with the $500 phone as the other option.
• Diversity illusion: This is the tendency to overestimate the amount of diversity in a group. For example, we might think that a group of people is diverse because they come from different backgrounds, even if they all share the same political views.
• Dunning-Kruger Effect: This is the tendency for people with low ability to overestimate their own ability, while people with high ability to underestimate their own ability. For example, a person with low knowledge of a particular subject might think that they are an expert, while a person with high knowledge of the subject might think that they are not as knowledgeable as they actually are.
• Empathy Gap: This is the tendency to underestimate the impact of negative events on others. For example, we might think that we would be able to handle a difficult situation better than someone else, even though we would not be able to handle it as well.
• Endowment effect: This is the tendency to value something more highly simply because we own it. For example, we might be more likely to be unwilling to sell a piece of jewelry that we own, even if we would be willing to buy a similar piece of jewelry for a lower price.
• Escalation Of Commitment: This is the tendency to increase our investment in a failing course of action, even though it is clear that the course of action is not going to be successful. For example, we might continue to invest in a failing business even though it is clear that the business is not going to be profitable.
• ♦ False Consensus Effect Bias: This is the tendency to believe that our own beliefs and opinions are more common than they actually are. For example, we might think that most people agree with our political views, even though they actually do not.
• False Memory: The creation or recall of inaccurate or false memories that feel real and convincing.
• Fear of Success: This bias leads people to believe that if someone else succeeds, it means that they will have to lose out. This can lead people to sabotage the success of others in order to protect themselves.
• Focusing illusion: This is the tendency to focus on a particular detail or aspect of a situation, while ignoring the broader context. For example, we might focus on the fact that a particular stock has gone up in value, while ignoring the fact that the overall market has also gone up in value.
• Forer effect: This is the tendency for people to believe that a personality description is accurate about them, even if the description is actually vague and general. For example, we might read a personality description that says “you are a deep thinker who is often misunderstood,” and we might believe that the description is accurate about us, even though the description could apply to many different people.
• ♦ Framing Effect: The way information is presented can influence judgments and decisions. Also see Retrospective Framing.
• Frequency Illusion: This is the tendency to notice something more often after we have become aware of it. For example, we might start to notice the number 11 everywhere after we have just seen it for the first time.
• Fundamental Attribution Error: This is the tendency to attribute other people’s behavior to their personality traits, while attributing our own behavior to situational factors. For example, we might think that someone who is rude to us is just a bad person, while we might think that we were rude to someone because we were having a bad day.
• The Gambler’s Fallacy: This is the mistaken belief that the outcome of a random event is influenced by previous outcomes. For example, we might think that we are more likely to win at roulette if we have lost a few times in a row.
• Group Attribution Error: This is the tendency to attribute the negative behavior of individuals to their group membership, while attributing the positive behavior of individuals to their individual characteristics. For example, we might think that all members of a particular group are lazy, even though there are some members of the group who are not lazy.
• Group Polarization: This is the tendency for groups to make decisions that are more extreme than the initial views of the individual members of the group. For example, a group of people who are initially opposed to a new policy might become even more opposed to the policy after discussing it together.
• Groupthink: This is the tendency for members of a group to make decisions that are not in the best interests of the group because they are afraid to disagree with the majority. For example, a group of executives might decide to launch a new product that is not well-researched because they are afraid to disagree with the CEO.
• Halo Effect: This is the tendency to make judgments about a person based on one positive or negative trait. For example, we might think that a person is intelligent because they are good-looking, even though there is no connection between the two traits.
• ♦ Hindsight Bias: This is the tendency to believe that we could have predicted an outcome after it has already happened. For example, we might think that we knew that a particular stock was going to go up in value, even though we actually had no way of knowing that at the time.
• The IKEA Effect: This bias describes the tendency of people to place a higher value on objects they have assembled or created themselves. When individuals invest their time and effort in building something, they develop a sense of ownership and attachment, leading them to overvalue the end product.
• ♦ Illusion of Control Bias: This is the tendency to overestimate our ability to control events. For example, we might think that we can control the weather or the outcome of a sporting event, even though we actually have no control over these things.
• Illusory Correlation: This is the tendency to see a connection between two events that are not actually related. For example, we might think that we are more likely to be in a car accident on Friday the 13th, even though there is no evidence to support this belief.
• Illusory Superiority: This is the tendency to overestimate our own abilities and accomplishments. For example, we might think that we are better drivers than most people, even though we are not.
• Impression management: This is the tendency to present ourselves in a way that makes us look good to others. For example, we might exaggerate our accomplishments or downplay our weaknesses in order to make a good impression on someone.
• In-group Bias: This is the tendency to favor members of our own group over members of other groups. For example, we might be more likely to help a friend than a stranger, even if the stranger is in more need of help.
• ♦ Just-World Hypothesis:The Just-World Hypothesis is a psychological theory that suggests that people have a strong need to believe that the world is a fair and just place. This belief can lead people to blame victims of misfortune for their own suffering, and to hold positive views of themselves and others.
• Loss aversion: This is the tendency to prefer avoiding losses to acquiring equivalent gains. For example, we might be more likely to walk away from a negotiation even if we are slightly ahead because we do not want to lose any ground.
• ♦ Magical Thinking: This is a cognitive bias that involves attributing causal relationships between unrelated events or believing that one’s thoughts, actions, or wishes can influence the outcome of unrelated events. It is characterized by a belief in supernatural or mystical powers, often defying rational or scientific explanations. People engaging in magical thinking may believe in luck, superstitions, or charms, convinced that certain rituals or behaviors will bring about desired outcomes or protection from harm. While magical thinking can serve as a source of comfort or a coping mechanism, it can also lead to unrealistic beliefs and decisions based on unfounded connections between events, making individuals susceptible to exploitation and deception.
• Matching hypothesis: This is the tendency to choose partners who are similar to us in terms of personality, values, and interests. For example, we might be more likely to be attracted to someone who is similar to us in terms of our political views, our religious beliefs, or our hobbies.
• Mental Accounting: This is the tendency to group our financial transactions into different categories, and to treat each category as if it were separate from the others. For example, we might be more likely to spend money on a vacation if we think of it as a “fun” expense, rather than as a “necessary” expense.
• Mere Exposure Effect: The tendency to develop a preference for things or people simply because they are familiar or have been encountered repeatedly.
• Negativity bias: This is the tendency to pay more attention to negative information than positive information. For example, we might be more likely to remember news stories about bad things that happen than news stories about good things that happen.
• ♦ Normalcy Bias: Normalcy bias, also known as the ‘disaster myopia’ or ‘normalcy illusion,’ is a psychological phenomenon that causes people to underestimate the likelihood of a disaster and overestimate their ability to cope with it. This bias can lead to complacency and inaction in the face of potential risks.
• ♦ Optimism Bias: This is the tendency to overestimate our own abilities and underestimate the risks involved in a situation. For example, we might think that we are less likely to be injured in a car accident than other people, even though we know that car accidents are a leading cause of death.
• Omission Bias: The tendency to perceive harmful actions as worse than harmful inactions, leading to a preference for doing nothing even when it is not the best choice.
• Ostrich Effect: This is the tendency to ignore or deny negative information. For example, we might avoid reading news stories about a particular topic because we do not want to be exposed to negative information about it.
• Outcome bias: This is the tendency to judge the success of a decision based on the outcome, rather than on the quality of the decision-making process. For example, we might think that a decision was good if it led to a positive outcome, even if the decision-making process was flawed.
• Overconfidence bias: This is the tendency to overestimate our own abilities and knowledge. For example, we might think that we are better drivers than we actually are, or that we are better at predicting the future than we actually are.
• Peak-end rule: This is the tendency to judge an experience based on its peak and its end, rather than on the overall experience. For example, we might remember a vacation as being more enjoyable than it actually was because we remember the peak experiences, such as the first time we saw the ocean, and the end of the vacation, when we were relaxed and happy.
• The Peltzman Effect: Named after economist Sam Peltzman, this bias describes the tendency of people to take more risks when safety measures are introduced. For instance, drivers might drive more recklessly if they believe their vehicles are equipped with advanced safety features.
• Placebo Effect: Experiencing positive effects or improvements in symptoms due to believing in the efficacy of a treatment, even if it is inert or lacks active ingredients.
• Planning Fallacy: This is the tendency to underestimate the amount of time and effort required to complete a task. For example, we might think that we can complete a project in a week, even though it will actually take us two weeks.
• Primacy Effect: This is the tendency to be more influenced by the first piece of information we receive than by subsequent information. For example, we might be more likely to form an opinion about a person based on their first impression, even if we later learn that the first impression was wrong.
• Procrastination bias: This is the tendency to delay tasks or decisions, even if we know that we should do them. For example, we might put off studying for an exam, even though we know that we need to study in order to do well on the exam.
• Rationalization: This is the tendency to justify our decisions after the fact, even if they were not well-thought-out. For example, we might buy a new car and then convince ourselves that it was a good decision, even if we were not really sure about it at the time.
• Reactance: This is the tendency to react negatively to attempts to persuade us. For example, if someone tries to convince us to do something that we do not want to do, we might be more likely to do the opposite.
• Recency Effect: This is the tendency to be more influenced by the most recent piece of information we receive than by earlier information. For example, we might be more likely to vote for a candidate based on their recent campaign promises, even if we previously had a negative opinion of the candidate.
• Representativeness heuristic: This is the tendency to judge the probability of something based on how similar it is to other things we know. For example, we might think that a particular stock is a good investment because it has gone up in value recently, even if we do not know anything else about the stock.
• ♦ Retrospective Framing: Retrospective framing is a cognitive bias that occurs when we interpret past events in a way that is consistent with our current beliefs or attitudes. This can lead to us misremembering or reinterpreting past events in a way that supports our current worldview. Also see the Framing Effect.
• Salience bias: This is the tendency to pay more attention to information that is salient, or noticeable. For example, we might be more likely to remember a news story about a terrorist attack than a news story about a natural disaster, even though the natural disaster killed more people.
• Scarcity Mindset: This bias leads people to believe that there is only a limited amount of success to go around. This can lead people to compete with each other for success, even if it means pulling each other down.
• Selection Bias: Drawing conclusions from a non-representative sample or biased data selection.
• Selective Perception: This is the tendency to see what we want to see and ignore what we do not want to see. For example, we might be more likely to notice news stories that confirm our existing beliefs, and less likely to notice news stories that contradict our beliefs.
• Self-fulfilling Prophecy: This is the tendency for our expectations to influence our behavior in a way that makes those expectations come true. For example, if we expect to fail at something, we are more likely to behave in a way that makes it more likely that we will fail.
• ♦ Self-Serving Bias: This is the tendency to take credit for our successes and deny responsibility for our failures. For example, we might think that we got a promotion because we are a good employee, but we might think that we got fired because our boss was unfair.
• Semmelweis Reflex: The tendency to reject or dismiss new evidence or information that contradicts established beliefs or practices.
• Serial Position Effect: Remembering and recalling information better when it is presented at the beginning (primacy effect) or end (recency effect) of a list or sequence.
• ♦ Shifting Baseline Syndrome: Shifting baseline syndrome (SBS) is considered a cognitive bias. SBS is a cognitive bias because it leads us to underestimate the magnitude of environmental change over time (including our personal environment.) We do this because we compare the current state of the environment to our own baseline, which is the environment that we grew up in. As each generation grows up, the baseline shifts, and we come to accept a lower level of environmental quality as normal. But it can also be that we compare the current to the most recently remembered baseline which may be very recent, and as such we do not see much change.
• Social Desirability Bias: The inclination to provide responses that are socially acceptable or desirable rather than truthful.
• Spotlight Effect: Overestimating how much attention or importance others place on our appearance, behavior, or performance.
• Status Quo Bias: This is the tendency to stick with the familiar and avoid change, even if the change would be beneficial. For example, we might continue to walk home from work at night, even though we know that it is dangerous because we are used to doing it and it is the easiest option
• Stereotype Threat: This is the tendency for people to perform worse on a task if they are aware of a stereotype that suggests that they will not perform well on the task. For example, a black student might perform worse on a math test if they are aware of the stereotype that black people are not good at math.
• Stereotyping: Making generalizations or assumptions about a group of people based on limited information or characteristics associated with that group.
• The Subadditivity Effect: This bias involves the underestimation of the total risk of multiple, simultaneous events compared to the sum of the risks of each event considered separately. For example, people may perceive the combined risk of two potential hazards as less than the sum of the risks of each hazard individually.
• ♦ Sunk Cost Fallacy Bias: This is the tendency to continue investing in a failing project because we have already invested a lot of time and money into it. For example, we might continue to work on a project that is not going well, even though it is clear that it is not going to be successful.
• ♦ Survivorship Bias: This is the tendency to focus on the successes of others, while ignoring the failures. For example, we might think that starting our own business is a great way to get rich, because we only hear about the successful entrepreneurs. However, we forget about all of the entrepreneurs who failed.
• System Justification Bias: This is the tendency to believe that the existing social order is fair and just, even if it is not. For example, we might believe that the rich deserve to be rich and the poor deserve to be poor, even if there is no evidence to support this belief.
• The Texas sharpshooter fallacy: This is the tendency to see patterns in random data. For example, we might see a pattern in the stock market, even though the pattern is actually random.
• Trade-off Bias: This is the tendency to focus on the losses associated with a particular option, while ignoring the gains. For example, we might be more likely to choose a sure thing, even if it is a smaller reward, than to choose a riskier option with the potential for a larger reward.
• ♦ Trauma Bias: Trauma bias is a type of cognitive bias that can occur when people have preconceived notions or beliefs about trauma and its effects.
  This bias can influence how people perceive, interpret, and respond to traumatic events and the people who have experienced them.
• ♦ Victim’s Bias – This is the belief that only other victims who have experienced the same type of crime can possibly understand what a victim has experienced. That somehow other victims become experts and are able to provide advice about victimization, criminology, and recovery psychology, even though they are only experts in the experience they had which is often not comparable to the other victims’ experience. It is often coupled with other biases, such as the Confirmation Bias leading victims to believe that another victim experienced exactly the same even though the details may be quite different. This can lead to serious errors of judgment after a crime by seeking out nonprofessionals that do not understand the need for grief processing, trauma counseling, or the recovery process.
• Wishful Thinking: This is the tendency to believe that something we want to be true is actually true. For example, we might think that we are going to win the lottery, even though the odds of winning are very low.
• Zeigarnik Effect: Better memory recall for incomplete tasks or interrupted activities compared to completed tasks.
• Zero-risk Bias: Preferring options that carry no risk, even when the benefits of a slightly riskier option outweigh the potential harm.
• Zero-sum Bias: This is the tendency to believe that there is a fixed amount of success or resources in the world, and that if one person gains, another person must lose. For example, we might believe that if one company makes a profit, another company must be losing money.

Summary

Cognitive biases do make people more vulnerable to scams, fraud, and deception by causing them to ignore warning signs, pay more attention to information that supports their preexisting beliefs, rely on incomplete information, and anchor their decisions to easy and often incorrect information. But they also play a role in helping you to remain blind to the crime as it is going on – though it is not your fault.

Of greater concern though is after the scam. These same biases can play a major role in preventing victims from recovering or even seeking the help they need.

By being aware of these biases and making an effort to overcome them, people can be better equipped to avoid falling victim to scams and other forms of deception, and better recover from these crimes after they end.

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