Every Psychological Trap Explained 13 Minutes

Summary

The video explains numerous cognitive biases that distort our thinking, like the ostrich effect where we ignore negative information, the halo effect where we generalize positive impressions to unrelated areas, and the bandwagon effect where we blindly copy others' behavior. It provides real-world examples to demonstrate each bias and then offers tips to counteract them, such as consciously shifting perspective, evaluating options independently, and questioning our motivations behind decisions. Understanding these mental shortcuts and flaws can help us make wiser choices in business, investing, and life by basing judgments on logic and facts rather than subjective feelings or social pressure.

Takeaways

• 😱 The ostrich effect is ignoring negative information or feedback, like not checking your bank account to avoid seeing spending.
• 😅 To counter the ostrich effect, regularly review your situation even if it's uncomfortable.
• 🚪 The inability to close doors means struggling to decide due to fear of missing other opportunities.
• 🔍 To avoid the contrast effect, recognize when a comparison is influencing your judgment.
• 🤵 Chauffeur knowledge is appearing knowledgeable but lacking true expertise.
• 🛠️ The Ikea effect means overvaluing something because you built it yourself.
• 😡 The curse of specificity means irrelevant details seem more persuasive.
• 🎭 The spotlight effect is overestimating how much people notice your appearance or behavior.
• 👼 The halo effect is when one good impression influences your view in other areas.
• ⏪ Loss aversion means fear of losing outweighs potential gains.

Q & A

What is the ostrich effect and how can you counter it?

The ostrich effect is when you ignore negative information or feedback like an ostrich burying its head in the sand. To counter this, regularly review your situation, even if it's uncomfortable.

What is the inability to close doors and how can you overcome it?

The inability to close doors is the difficulty in making decisions due to the fear of missing out on other opportunities. To overcome it, focus on one thing at a time instead of working on multiple things and getting average results.

How does the contrast effect influence your judgement?

The contrast effect is when your judgement of one thing is affected by a recent exposure to something else. For example, a house can look amazing after seeing a house in terrible condition.

What are the characteristics of chauffeur knowledge?

Chauffeur knowledge is when someone seems knowledgeable and confident but lacks genuine expertise. Such people repeat phrases like a parrot. To identify them, ask more questions because they can't provide deeper insights.

What is the Ikea effect?

The Ikea effect is when you value something more because you put effort into creating it, like furniture you assemble yourself. To avoid overvaluing your work, get external feedback to see its real value.

How does the curse of specificity make information seem more persuasive?

The curse of specificity makes extremely detailed but irrelevant information seem more persuasive. Recognize that specifics don't necessarily reflect the bigger picture or support an argument.

How can you use the pigmalion effect to boost your performance?

The pigmalion effect is when higher expectations from yourself increase your performance. For example, aim to achieve your 1-year goal in 3 months. The book '12 Week Year' explains this.

What is the consistency principle and how can you use it?

The consistency principle means people want to act consistently with what they've said or done before. Finding someone to hold you accountable can help you stick to goals due to this desire for consistency.

What causes the planning fallacy and how can you avoid it?

The planning fallacy is underestimating how long tasks will take, like thinking you can clean your whole house in an hour. To avoid this, always add extra time to your plans.

How does confirmation bias influence people's thinking?

Confirmation bias makes people notice only things that confirm what they already believe. To avoid this, actively look for information that challenges your views to make more objective decisions.

Outlines

00:00

😟 The Ostrich Effect

The ostrich effect refers to ignoring negative information or feedback like an ostrich burying its head in the sand. To counter this, regularly review your situation even if it's uncomfortable.

05:01

🔐 Inability to Close Doors

The inability to close doors means having difficulty making decisions due to the fear of missing out on other opportunities. To resolve this, focus on one thing at a time instead of working on multiple ideas without results.

10:01

😲 The Contrast Effect

The contrast effect is when your judgment of something is affected by a recent exposure to something else. For example, realtors may show you a terrible house before the actual good house they want to sell, making the actual house look better in comparison.

Keywords

💡ostrich effect

The ostrich effect refers to the tendency to ignore negative information or feedback instead of confronting it. For example, not checking your bank statement because you fear seeing how much you have overspent. This is compared to ostriches supposedly burying their heads in the sand. The video advises regularly reviewing your situation, even when uncomfortable, to counter this bias.

💡contrast effect

The contrast effect is when your judgment of something is impacted by a recent exposure to something else that differs greatly. For example, a realtor showing you a terrible house before showing you the nice house they want to sell. The nice house seems even better due to the contrast. This can manipulate people's perceptions.

💡chauffeur knowledge

Chauffeur knowledge refers to when someone seems knowledgeable but actually lacks real expertise. They simply repeat memorized information without deeper insight, similar to a chauffeur following directions. The video advises asking more questions to reveal the lack of expertise.

💡Ikea effect

The Ikea effect means overvaluing something you put effort into creating yourself, like furniture you assemble. To avoid this bias, the video recommends getting external feedback to objectively judge your own work's value.

💡spotlight effect

The spotlight effect is the belief that your mistakes and flaws are more noticeable to others than they actually are. People tend to be focused on themselves rather than closely scrutinizing you. Reminding yourself of this can reduce anxiety.

💡halo effect

The halo effect refers to when your impression of someone in one area shapes your view of them in other unrelated areas. For example, thinking someone trustworthy because they dress well. The video advises judging each situation independently.

💡sunk cost fallacy

The sunk cost fallacy leads you to persist in something, ignoring future returns, based solely on what you have already invested. For example, continuing a terrible meal just because you paid for it already. Instead, the video says to consider potential future gains.

💡negativity bias

Negativity bias makes you pay more attention to negative events, like only remembering the one critical comment and not the many positive ones. The video reflects on how this bias leads to focusing disproportionately on minor negative feedback.

💡consistency principle

The consistency principle means you want to remain consistent with your past words and deeds. For example, telling friends you will start exercising makes you more likely to do so. Finding someone to hold you accountable can reinforce commitment.

💡confirmation bias

Confirmation bias leads you to only notice information confirming existing beliefs and ignore contradictory evidence. For example, only noticing wins by your favorite sports team. The video advises actively looking for information challenging your views.

Highlights

The ostrich effect is when you ignore negative information or feedback like an ostrich burying its head in the sand.

The inability to close doors is the difficulty in making decisions due to the fear of missing out on other opportunities.

The contrast effect is when your judgment of one thing is affected by a recent exposure to something else.

Chauffeur knowledge is when someone seems knowledgeable but lacks genuine expertise in a subject.

The Ikea effect is when you value something more because you put effort into creating it.

The curse of specificity is when extremely detailed but irrelevant information seems more persuasive.

The spotlight effect is when you think people notice your appearance mistakes more than they actually do.

The halo effect is when your impression of someone in one area influences your opinion of them in other areas.

Reciprocity is when you feel obliged to give back when someone gives you something.

The self-serving bias is when you credit yourself for successes but blame external factors for failures.

The sunk cost fallacy is when you keep doing something just because you've already invested a lot in it.

The paradox of choice is when having too many options makes it harder to make a decision.

The end of history illusion is when you believe that who you are now is who you'll be forever.

The consistency principle is based on the desire to be consistent with what we have previously said or done.

Confirmation bias is when people only notice things that support what they already believe.

Transcripts

the ostrich effect the ostrich effect is

when you ignore negative information or

feedback like an ostrich burying its

head in the sand like not checking your

bank account because you don't want to

see how much you've spent to counter

this regularly review your situation

even if it's

uncomfortable inability to close doors

the inability to close doors is the

difficulty in making decisions due to

the fear of missing out on other

opportunities for example you work on

three business ideas at once you know

that focusing on one one is much more

effective but you don't want to lose all

the progress on the other two so you

keep working on all three and keep

getting no results or average results

focus on one thing the contrast effect

the contrast effect is when your

judgment of one thing is affected by a

recent exposure to something else for

example some Realtors intentionally

start by showing you a house in terrible

condition before they show you the

actual house they want to sell the

actual house looks amazing in comparison

making you like it more chauffeur

knowledge chauffeur knowledge is when

someone seems knowledgeable and

confident but lacks genuine expertise in

a subject such people are similar to how

a parrot memorizes a few phrases and

repeats them over and over to identify

such people ask more questions because

they can't provide deeper insights the

Ikea effect the Ikea effect is when you

value something more because you put

effort into creating it like Furniture

you assemble yourself to avoid

overvaluing your work get external

feedback

this helps you see the real value of

your efforts and make objective

decisions the curse of specificity the

curse of specificity is when extremely

detailed information seems more

persuasive even if it's irrelevant for

example right now it's 8:16 in the

evening I'm in Starbucks sitting in the

corner in a soft yellow armchair the

aroma of coffee and the soft music are

amazing I'm drinking a warm delicious

cappuccino while typing the script on my

laptop okay right now you can probably

picture me sitting in that yellow

armchair you might have believed me as

well but the truth is I made it up I'm

at home trying to concentrate on this

script while my 5-year-old daughter is

screaming in the other room for some

reason the spotlight effect the

spotlight effect is when you think

people notice your appearance mistakes

or behavior more than they actually do

to avoid this remind yourself that

others are usually tooo focused on

themselves to notice minor things about

you this reduces anxiety and helps you

focus on what you are doing the halo

effect the halo effect is when your

impression of someone in one area

influences your opinion of them in other

areas like thinking someone is

trustworthy because they dress well or

they are good-look to avoid this judge

each situation or decision on its own

facts reciprocity reciprocity is when

you feel obliged to give back when

someone gives you you something like

feeling you must buy from a store

because you got a free sample to avoid

such influence recognize when you're

acting out of obligation rather than

genuine desire the self-serving bias the

self-serving bias is when you credit

yourself for successes but blame

external factors for failures like

thinking your win was all skill but your

loss was just bad luck to avoid this

practice taking responsibility for your

actions both good and bad the dito

effect the dito effect is when acquiring

a new possess session leads to a spiral

of additional purchases such as buying a

new outfit and then filling the need to

upgrade other items to match to avoid

this be mindful of how one purchase can

influence your overall spending the

anchoring effect the anchoring effect is

when your first impression or an initial

number shapes your subsequent thinking

for example thinking a $50 shirt is

cheap because you saw a similar one for

$200 first always view offers and

decisions independently not just in

comparison to the First Option you see

negativity bias negativity bias is when

you pay more attention to negative

events than positive ones for example I

would read 100 comments under my videos

and 99 of them would be positive and

only one negative guess which comment I

end up remembering and thinking about

yep you're right that one comment from

some random guy who probably has nothing

going on in his life and spends his

whole day in his pajamas sitting in his

messy room arguing with people on the

internet

now that I say this I realize how

ridiculous it sounds but most of us are

programmed to focus on the negative to

counter this we consciously need to

shift our perspective to positive events

and be grateful the sunk cost fallacy

the sunk cost fallacy is when you keep

doing something just because you've

already invested a lot in it not because

it's the best choice right now this is

like continuing to eat a terrible meal

just because you paid for it to beat

this think about what's the best action

starting from today your investment or

business decisions need to be based on

potential future returns rather than

past costs the Paradox of choice the

Paradox of choice is when having too

many options makes it harder to make a

decision for example have you felt

overwhelmed while choosing from a menu

with 50 dishes to counter this limit

your own options and the options you

give to others for example if you're

selling three products mentioning the

one that is the best seller can simplify

the decision-making process and lead to

a sale

the framing effect the framing effect is

when your decisions are influenced by

how information is presented for

instance imagine a doctor says there's a

90% chance you will survive but now

imagine the doctor says there is a 10%

chance you'll die both statements mean

the same thing but you would feel

terrible in the second case always

consider facts from multiple

perspectives before making a

decision the end of History illusion the

end of History illusion is when you

believe that who you are now is who

you'll be forever to counter this

embrace the idea of change recognize

that your preferences and beliefs will

change and that's okay the pigan effect

the pigmalion effect is when a higher

expectation from yourself leads to an

increase in performance for example if

you aim to achieve your one-year goal in

3 months your performance will

significantly increase there's a book on

this channel titled 12we year which

explains how to do that consistency

principle the consistency principle is

based on the desire to be consistent

with what we have previously said or

done for instance if you tell your

friends that you plan to start

exercising regularly you're more likely

to stick to it that's why finding

someone to hold you accountable can

significantly enhance your commitment to

your goals the planning fallacy the

planning fallacy is when you

underestimate how long it will take to

do something like thinking you can clean

your whole house in an hour to avoid

this always add some extra time this

helps you plan your day better and

reduce stress

confirmation bias confirmation bias is

when people only notice things that

support what they already believe for

example if you think your favorite

soccer team is the best you might only

notice the games they win to avoid this

actively look for information that

challenges your views this helps you

make decisions based on all the facts

not just what you want to believe the

bandwagon effect the bandwagon effect is

copying what others do like buying a

trendy phone just because everyone else

has it not because you need it to avoid

this ask yourself why you're making a

decision is it really what you want or

are you following the crowd the done and

Krueger effect the done and Krueger

effect is when people with less skill or

knowledge overestimate their ability

this is like reading a few famous books

on investing and believing that you now

know it all to avoid this especially

when making important decisions consult

with experts loss aversion loss aversion

is when the fear of losing something

motivates you more than the potential

gain like not investing in a good

opportunity because you're scared to

lose money to beat this focus on what

you could gain not just what you could

lose the decoy effect the decoy effect

is when your preference between two

options changes when a third less

attractive option is introduced like

choosing a medium popcorn because it

seems cheaper compared to the large one

to avoid this evaluate each option alone

this helps you to choose what you really

want not just what seems like a better

deal in comparison the availability

heuristic the availability heuristic is

when you judge the likelihood of events

based on how easily you can remember

them you might believe plane crashes are

common simply because it has been on the

news a lot recently to avoid this look

for actual facts and statistics before

making a decision the gambler's fallacy

the gamblers fallacy is when you think

past events affect future ones

especially in random situations like

thinking you're about to win after

losing a coin toss several times

remember that each event is independent

especially in random scenarios this

helps you make decisions based on logic

not not false patterns the hindsight

bias the hindsight bias is when you

believe after an event has occurred that

you predicted it even though you didn't

like after a game saying you knew the

outcome all along the reactant bias the

reactant bias is when you want to do the

opposite of what you're told because you

feel your freedom is being threatened

like not wanting to wear a seat belt

just because a sign says You must to

avoid this focus on why the action is

beneficial for you not because you're

being told to do it action bias action

bias is when you feel pressured to act

even when doing nothing is a better

choice like feeling you must do

something in a slow business period when

waiting might be wiser to avoid this

consider the benefits of patience and

not acting Sometimes the best action is

no action survivorship bias survivorship

bias is when you only notice the big

successes and forget about the struggles

and failures it's like thinking that

having your own business means wearing

suits and sitting in fancy offices just

because that's what you see in the media

you don't see the sleepless nights

arguments with their Partners tough

decisions and risks they took to get

there before jumping into a new business

research both sides to get a real view

the unity principle the unity principle

is when you're more persuaded by people

who you feel are part of your group like

trusting a product more if the person

selling it comes from your hometown to

avoid it make your decisions based on

the information

not just on who is presenting

it the zynic effect the zaric effect is

when you remember uncompleted tasks

better than completed ones for example

constantly thinking about a report that

you need to finish to use this to your

advantage organize tomorrow today every

day at lunchtime take a few minutes to

plan your next day the moment you create

a plan your subconscious mind goes to

work on it in the background when you

wake up the next day you will have a

clear to-do list plus plus some creative

ideas the bystander effect the bystander

effect is when you're less likely to

help someone in need when others are

present for example not speaking up in a

meeting because you think someone else

will avoid sending an email or a request

to a group of people and saying hi can

someone please help me everyone will

probably ignore it thinking somebody

else will help address your request to a

specific person instead the ambiguity

effect the ambiguity effect is

essentially our tendency to avoid

choices that are unclear even if they

might lead to better results for example

when you are in a restaurant instead of

trying a new dish that you might end up

loving you go for the same average meal

you always order assess the risks and

benefits of ambiguous options sometimes

taking well-calculated risks can lead to

significant rewards the curse of

knowledge the curse of knowledge is when

you assume others know what you know

leading to unclear communication to

avoid this put yourself in your audience

audience's shoes and imagine what it was

like when you were a beginner picture

what it was like not knowing it explain

it as if you are explaining it to your

younger self illusion of averages the

illusion of averages is the mistaken

belief that average numbers always

reveal the full story for example you're

in a car with two of your best friends

suddenly your friend's friend joins you

as well and he turns out to be Elon Musk

now can you tell me what the average

wealth in that car is you see it's

nonsense to talk about averages in this

case that is why Always dig deeper

especially in business and investing

depending on the size of the data

averages might mean nothing the

endowment effect the endowment effect is

when you value something more just

because you own it like not throwing

away your old clothes despite the fact

that you don't wear them anymore and

there is no space on the Shelf to avoid

this see things from an outsider's

perspective many of the principles

mentioned in this video are covered in

my long form videos if you want to learn

more check out the playlist you see on

your screen thanks for

watching