So are you. So are we all humans. Next time you think someone is acting irrational, remind yourself that we are all irrational by default. It takes effort to overcome our biases and logical fallacies to become rational.
Sometimes, being irrational gives us an advantage. Sometimes, it results in us shooting ourselves in the foot. In either case, it pays off to be conscious about our being irrational and correcting ourselves whenever possible.
How Do We Recognize When We Are Irrational?
We can use the four levels of learning model to improve our rationality. The first step is go from the level of unconscious incompetence to conscious incompetence. We do that by learning what we don’t know we don’t know. Books such as Thinking Fast and Slow by Daniel Kahneman and Influence by Robert Cialdini are great places to start.
We are irrational by default.
Sometimes, it’s enough to learn about a bias or fallacy to recognize it in us and to not act on it. In other cases, it requires more effort and awareness. In either case, the first step to becoming more rational is to accept that we are irrational by default.
We are irrational by default, because it had its evolutionary advantages. Being rational requires thinking through things. It takes time and effort. You don’t have that kind of time when you are confronted with a wild animal in savannah. In such cases, we default to simple biases and heuristics, simple rules of thumb, such as “see animal bigger than me, run away.”
Learn About Biases and Fallacies
We all carry most of our biases and heuristics that our ancestors developed over billions of years. We are not even aware of most of them. As a result, we act on them unconsciously. This is the unconscious incompetence level. It takes conscious effort to learn about these biases and heuristics, recognize them in ourselves, and then let them go, not act on them.
When I was a toddler, I was afraid of cats. I had no reason to be afraid of cats. I wasn’t attacked by a cat. Just the mere sight of an animal made me afraid. When I shared my fear with my parents, they explained me that there was nothing to be afraid of a cat. I overcame that fear easily.
Acknowledging our own irrationality is the first step to overcome it.
As I learn more about biases, I started to recognize them in myself. As soon as I recognize a bias in myself, I moved from unconscious incompetence to conscious incompetence. I was conscious that I was incompetent.
I became aware of a confirmation bias the other day. I sold my Ripple before it started its tenfold increase. I sold it, because its use case, being an interbank currency, would make it a stable currency. Obviously, this conclusion was incorrect and the market showed it.
My Confirmation Bias
The other day, I caught myself reading an article with the hope that the author agreed with my initial conclusion about Ripple. I had a conclusion. I acted on it. The market proved me wrong. And I still kept hanging on my conclusion and looked for evidence that confirms my conclusion. This is called confirmation bias. And yes, it is one of the many biases and heuristics that makes me irrational.
As soon as I recognize that I have confirmation bias, I move from the level of unconscious incompetence to conscious incompetence. The next level is conscious competence. That is consciously letting go of my confirmation bias on this issue. It takes time and effort to do that.
Acknowledge, Learn the Lessons, and Let Go
I recognize that my initial conclusion was incorrect. The markets have shown me that. The idea here is to learn a lesson about this experience. The lesson is that the markets can move against my opinions. It doesn’t make any sense to stick to my opinions until the bitter end.
As I remind myself the lesson I learned over and over, I move from the conscious competence level to unconscious competence. It becomes my default state. I’m comfortable with it. It doesn’t take any effort to get into that mental state anymore. In this case, I completes the circle of four levels of learning.
Call to Action
We all have our set of biases and logical fallacies. What are the ones that you recognized in yourself lately? How are you going to let go of them?
This post is for information purposes only and not intended to be investment advice.
Software developer with a Ph.D. and 15 years of experience. I write daily on personal development and life lessons. Sign up to my email newsletter to receive a weekly overview of my latest content on personal development and life lessons.