2014 PI Works! Cognitive Biases by Dan Hahn MS

1. Cognitive Biases in Public Participation
Processes
Ursina Teuscher, PhDSam Imperati, JD Dan Hahn, MS
teuscher-counseling.com workforceuniverse.commediate.com/icm/

2. Public Sector and Non-Profit
Alaska Federal & State Judges
Atkinson School of Management
American Arbitration Association
Bonneville Power Administration
Beaverton, Hillsboro, Portland, Salem & Tigard Schools
Cities of Bend, Damascus, Fairview, Lake Oswego,
Sherwood, Tallahassee (FL), Tigard, Troutdale, and
Wood Village
Central Oregon Community College Clean Water Services
Counties of Clackamas, Multnomah, & Washington
Executive Officers Club
Federal Court Clerks Association Hillsboro Chamber of
Commerce Idaho Federal & State Judges
Institute of Internal Auditors and Institute for Professional in
Taxation
Johns Landing Chamber of Commerce
Long Term Care Ombudsman Office
Metro Fire Officer Academy
Clackamas, Marion and Washington
Counties
National Association of Securities Dealers
(FINRA)
National Association Regulatory Attys.
Ninth Circuit Court of Appeals
Oregon Court of Appeals
Oregon DAS, DEQ, DLCD, DOT, DOJ,
EMPL, Lands, PUC, WCB & WCD
Oregon Executive MBA Program
Oregon Health Science University
OR, MT & ID State Bar Associations
Representative Clients
Private Sector
Abercrombie & Fitch
Advanced Data Concepts
Bristol-Meyer Squibb
California Canned Peach Growers
Chevron
Counselors of Real Estate
Dow Corning
EdPlus Holdings
EDS Corporation
Footwise
Fred Meyer, Inc.
Fujitsu America
GE Capital
Heery International
Hydaburg Fisheries & Tribe
InFocus Systems, Inc.
One Block Off The Grid
Statement of Rates
Portland Community College
Providence Hospitals, Olympia & Portland
Sacred Heart Medical Center
Swedish Medical Center
Universities of Idaho, Oregon and
Washington
Unitus
U.S. Bankruptcy/District Courts: Southern
District of New York, Western District of
Pennsylvania, California & Oregon
U.S. Bureau of Land Management, U.S.
Immigration & Naturalization Service, U.S. Forest
Service, & U.S. Soil Conservation Service
Western Conference of Workers Comp Insurers
Washington Assoc. of Medical Staff Services
VA Medical Councils: NY, OR-WA, LA
WA and OR State Bar Associations
WA, OR, MT, and ID Mediation Associations
NW Natural
Portland General Electric
Portland Metropolitan Area Realtors Professional
Profunds
Liability Fund
Safeway, Inc.
State Accident Insurance Fund
Seminar Group
Shell Oil
Standard Insurance Company
State Farm
Virginia Mason Medical Centers
Waggener Edstrom
Women Entrepreneurs of Oregon
Xerox

3. Understanding how cognitive biases influence
participant opinion in your public process
Tools you can use to help those participants:
● Recognize their impact
● Re-think their points of view
● Provide balanced recommendations
Workshop Goal

4. Agenda
● Cognitive conflict awareness
● Cognitive bias overview and exercises
● Solutions

5. Decision Making and Emotion
“Cognitive Conflict” = Importance x Uncertainty
Examples:
1. High Importance and High Uncertainty
2. High Importance and Low Uncertainty
3. Low Importance and High Uncertainty
4. Low Importance and Low Uncertainty
Too much cognitive conflict creates PANIC
Too little creates APATHY
Janis, I. L., & Mann, L. Decision Making: A psychological analysis of conflict. NY: Free Press.
Berlyne, D. E. Structure and Direction in Thinking. NY: Wiley

6. Navigating Psychological Traps
The $20 Auction:
1. Bidding starts at $1 and proceeds in $1 increments.
And, yes, this is for real money!
1. No jump bidding.
2. Fair warning before the auction ends.
3. No communication, verbal or nonverbal, is allowed.
4. Highest bidder pays what they bid and gets $20.
5. Second highest pays what they bid.
A) Competitive Arousal (Rivalry), Spotlight, & Time Pressures
Avoid Them!

7. C) Concession Aversion:
People perceive equal trades as unequal:
● Losses are overvalued
● Gains are undervalued
● Equal trades are difficult to make
I used to have
an apple...
I used to have
an orange...

8. D) Construal Biases:
People think others hold more extreme views than they do in a partisan
situation

9. E) Fairness as a Decision-Making Criterion:
People reject deals that leave them better off than no deal if they perceive that
their norms of fairness are being violated in accepting the deal.

10. F) Fundamental Attribution Error:
We react to situations while others act in accordance with immutable character
traits.
i.e. - We attribute good motivations to ourselves and bad to others.
That train
derailment
made me late!
You’re late
because you’re
lazy!

11. G) The Availability Bias:
Tendency to focus on information that is more readily available to us.
People overestimate causes of death that make the news (airplane vs car
crashes, cancer vs asthma).

12. The Ladder of Inference
7. We are mystified and frustrated by their position
6. We are confronted with the opposing view
5. We take action based on that belief
4. We then make the assumption that the only logical
conclusion is that we are right and they are wrong
3. We subconsciously select the data that supports are
preconceived position
2. We don’t appreciate we are only capable of
processing some of it
1. We start with a large pool of available data
Adapted from Peter Senge
H) Confirmation Bias:
The undermining of data that is inconsistent with our pre-existing mindset;
thus “overvaluing” our position

13. Quickly read the colors of the inks:
RED
ORANGE
YELLOW
GREEN
BLUE
PURPLE

14. Again, read the colors of the inks:
RED
ORANGE
YELLOW
GREEN
BLUE
PURPLE
I) Automatic Cognitive Processes:
Control us more than we want to admit

15. J) Sunk Costs Trap
We tend to favor alternatives which we have incurred substantial costs for
Even though these costs were incurred in the past and usually
unrecoverable
Previous investment should not be considered when evaluating new
alternatives

16. Pop Quiz: First Question
● If you choose to exit now through Door 1, you get an envelope
with $200.
● If you choose Door 2, you get a sealed envelope randomly
pulled from a bag.
● 20% of the envelopes contain $1,000 and 80% are empty.
● Which do you choose?

17. Second Question
● The doors are now locked. If you go out Door 1, you will be
required to pay $200.
● If you choose Door 2, you get a sealed envelope randomly
pulled from a bag.
● 20% of the time you will be required to pay $1,000. 80% of the
time you leave for free.
● Which do you choose?

18. L. Loss Aversion:
People often fear losses more than they value gains even when the amounts
(expected utilities) are the same!
Door 2
Door 1
$200
20%
80%
$1,000
$0
20% * $1,000 = $200
80% * $0 = $0
+ = $200
= $200

19. The Punch Lines
● Smart people make systematic decision making
mistakes on a regular basis
o Effects many managerial and executive decisions
Why? Automatic cognitive processes are habit-bound. We
are each so darn human!

20. Example
“TheCatChasedTheDog”
is easier to understand
and remember than
“daCCaDeteghhhosTeT”

21. Mentally Evaluating Simultaneous
Considerations is Challenging:
“What day follows the day before yesterday
if two days from now will be Sunday?”

22. Instead, Divide and Conquer
What day is two days before Sunday?
Easy! Friday
If today is Friday, what day was the day before
yesterday?
Easy! Wednesday
If today is Wednesday, what day is tomorrow?
Easy! Thursday

23. This list is difficult to process and
remember:
CARROT, LAWYER, PLANE, SPEAR, TRUCK,
PEAS, KNIFE, SAILOR, PISTOL, BROCCOLI,
DOCTOR, BOAT, SWORD, CAR, CORN,
PLUMBER,
Bousefield, W. A. (1953). The occurrence of clustering in the recall of randomly arranged associates. Journal of
General Psychology, 49, 229-240.

24. The following list is easier to
process and remember:
CARROT, BROCCOLI, CORN, PEAS,
KNIFE, PISTOL, SPEAR, SWORD,
TRUCK, CAR, BOAT, PLANE,
DOCTOR, LAWYER, PLUMBER, SAILOR
We understand better when we organize attributes
into groups
Cofer, C. N. (1951). Verbal behavior in relation to reasoning and values. In H. Guetzkow (Ed.), Groups,
Leadership, and Men. Pittsburgh: Carnegie Institute for Conflict Press.

25. We Understand Differently When
We Arrange Attributes Differently
SKYSCRAPER, TEMPLE, CATHEDRAL, PRAYER
suggests the category “buildings”, and PRAYER
seems not to belong.
PRAYER, TEMPLE, CATHEDRAL, SKYSCRAPER
suggests the category “religion”, and SKYSCAPPER
seems not to belong.

26. Solution: Attribute Re-framing
We are afraid of noise, pollution,
inconvenience, reduced overall quality of life,
higher taxes

27. Solution: Attribute Re-framing
Better:
Calm, cleanliness, convenience, quality of
life, investment
Crum, A. J., Salovey, P., & Achor, S. (2013). Rethinking stress: The role of mindsets in determining the
stress response. Journal of Personality and Social Psychology, 104(4), 716–733.
Achor, S. (2013). Before Happiness: Five Actionable Strategies to Create a Positive Path to Success.
Random House.

28. Solution: Priority Checklist
Well Structured Set of Priorities:
❏ Fundamental (not instrumental)
❏ Positive
❏ Non-redundant
❏ Objective/quantifiable
❏ Meaningful
❏ Complete
❏ Relevant
❏ Independent

29. Solution: Decision Tables
Criterion 1 Criterion 2 Criterion 3 Criterion …
Option 1
Option 2
Option 3
Option …

30. Solution: Decision Tables
25% 40% 15% 20%
Benefit for
Local
Business
Expense
Neighborhood
Aesthetics
Parking
Pedestrian
Zone
Bike Paths
Weekend
Closures
No Change

31. Solution: Decision Tables
25% 40% 15% 20%
Benefit for
Local
Business
Expense
Neighborhood
Aesthetics
Parking
Pedestrian
Zone
High Moderate Excellent Poor
Bike Paths Moderate High No Change Moderate
Weekend
Closures
Moderate Moderate Moderate Moderate
No Change None Low Unchanged
Unchange

32. Solution: Decision Tables
25% 40% 15% 20%
Benefit for
Local
Business
Expense
Neighborhood
Aesthetics
Parking
Pedestrian
Zone
High Moderate Excellent Poor
Bike Paths Moderate High No Change Moderate
Weekend
Closures
Moderate Moderate Moderate Moderate
No Change None Low Unchanged
Unchange

33. Solution: Decision Tables
25% 40% 15% 20%
Benefit
for Local
Business
Expens
e
Neighborhood
Aesthetics
Parking
Pedestrian
Zone
10 5 10 3 6.6
Bike Paths 5 1 4 5 3.25
Weekend
Closures
5 5 6 4 4.95
No Change 3 9 5 5 6.1

34. Solution: Decision Tables
A) Provides external memory
B) Compares alternatives systematically
C) Focuses on outcomes and facts
D) Analyzes outcomes by attributes/criteria
E) Arranges attributes/criteria into weighted
groups

35. Solution: Decision Trees
No Pedestrian Zone
(No Change)
+ $125,000 for Local
Business
75%
25%
Pedestrian
Zone (New)
- $300,000 on Local
Business
No Change
$18,750
Expected Utility
$0
75% * $125,000
+ 25% * - $300,000

36. Solution: Structuring Uncertainty w/
Multiple Criteria

37. Solution: Decision Trees

38. Solution: Education
Someone takes a strident stand
Poster child for cognitive biases
How do you confront this and save face?
Normalize the reaction:
“I’m not surprised to see polarized
views…”

39. Thank you
teuscher-counseling.com workforceuniverse.commediate.com/icm/
Ursina Teuscher, PhDSam Imperati, JD Dan Hahn, MS