๐๐ฏ๐๐ซ๐๐จ๐ง๐๐ข๐๐๐ง๐๐.
Overconfidence is a set of biases rooted in an unjustified certainty in the legitimacy of oneโs opinions.
In a study done, demand planners were more than 10% more likely to be overconfident that non-demand planners. This phenomenon is consistent with other research that finds for groups of people whose opinions are consistently sought, the prevalence of Overconfidence Bias tends to increase.
A notable subset of Overconfidence is the ๐๐ฎ๐ง๐ง๐ข๐ง๐ -๐๐ซ๐ฎ๐ ๐๐ซ ๐๐๐๐๐๐ญ, which shows that less experience correlates with greater overconfidence; and overconfidence can actually become lack of confidence as experience increases. Studies have found the degree of Overconfidence in Demand planning responders was about 20% higher in those who had less than one year experience, versus those with five or more years of experience.
๐ ๐ซ๐๐ฆ๐ข๐ง๐ ๐๐๐๐๐๐ญ.
The Framing Effect is one of the strongest biases in decision-making because it is tied to multiple psychological drivers. It refers to the tendency of people to alter their opinions when presented with the same data but framed in a more or less appealing way. There are few biases more demanding of well-defined decision trees and a detailed choice architecture than the Framing Effect.
Considering that in most organizations, demand planning is charged not only with evaluating and integrating multiple sets of data, but of eliciting the data from sources certain to frame it in such a way as to further their personal interests, these results are especially eye-opening.
๐๐๐ฆ๐๐ฅ๐๐ซโ๐ฌ ๐ ๐๐ฅ๐ฅ๐๐๐ฒ.
The Gamblerโs Fallacy, occurs when an individual erroneously believes that a certain random event is less likely or more likely, given a previous event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future. This fallacy can be used as an insight into the strength of the individualโs knowledge of statistical probability concepts.
๐๐๐ซ๐ฌ๐ข๐ฌ๐ญ๐๐ง๐ญ ๐๐ข๐ซ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ข๐๐ฌ (๐๐ฉ๐ญ๐ข๐ฆ๐ข๐ฌ๐ฆ/๐๐๐ฌ๐ฌ๐ข๐ฆ๐ข๐ฌ๐ฆ).
Persistent Directional Bias indicates the tendency of a person to consistently interpret events through an unjustifiably positive or negative lens. It can be amplified by Present Bias, the Framing Effect and a number of other biases and heuristics. Of all biases present in planning, this set has the most pervasive effect, but is also the easiest to correct.
๐๐ฅ๐ฎ๐ฌ๐ญ๐๐ซ ๐๐ฅ๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง ๐๐ง๐ ๐ ๐๐ฅ๐ฌ๐ ๐๐๐๐ฌ๐จ๐ง๐๐ฅ๐ข๐ญ๐ฒ.
Cluster Illusion Bias is the tendency, especially among planners, to erroneously consider randomly occurring data distributions to be systemic or non-random.