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Bias in Human Decision-Making

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Understand, Manage, and Prevent Algorithmic Bias

Abstract

As you will see in the following chapters, algorithmic biases originate in or mirror human cognitive biases in many ways. The best way to start understanding algorithmic biases is therefore to understand human biases. And while colloquially "bias" is often deemed to be a bad thing that considerate, well-meaning people would eschew, it actually is central to the way the human brain works. The reason is that nature needs to solve for three competing objectives simultaneously: accuracy, speed, and (energy) efficiency.

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Notes

  1. 1.

    John Coates, The Hour Between Dog and Wolf, New York: The Penguin Press, 2012.

  2. 2.

    Daniel Drubach, The Brain Explained. New Jersey: Prentice-Hall, 2000.

  3. 3.

    Buster Benson, “Cognitive Bias Cheat Sheet,” https://betterhumans.coach.me/cognitive-bias-cheat-sheet-55a472476b18 , September 1, 2016.

  4. 4.

    D. Lovallo and O. Sibony, “The case for behavioral strategy,” McKinsey Quarterly, 2(1), 30-43, 2010.

  5. 5.

    The examples here are taken from and further referenced in D. Dunning, C. Heath, and J.M. Suls, “Flawed self-assessment: Implications for health, education, and the workplace,” Psychological science in the public interest, 5(3), 69-106, 2010.

  6. 6.

    It is a general limitation of social psychology that most empirical research is done within the context of Western culture, with a substantial portion of the research carried out even more narrowly with North American college students. The few studies testing Western theories in Asian cultures such as Japan or China regularly find important cultural differences.

  7. 7.

    D. Kahneman, J.L Knetsch, and R.H. Thaler, “Anomalies: The endowment effect, loss aversion, and status quo bias,” Journal of Economic Perspectives, 5(1), 193-206, 1991.

  8. 8.

    T. Baer, S. Heiligtag, and H. Samandari, The business logic in debiasing, McKinsey & Co, 2017.

  9. 9.

    https://blogs.sas.com/content/forecasting/2014/04/30/a-naive-forecast-is-not-necessarily-bad/

  10. 10.

    E. Teach, “Avoiding Decision Traps,” CFO, June 1, 2004; Retrieved October 29, 2018.

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© 2019 Tobias Baer

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Baer, T. (2019). Bias in Human Decision-Making. In: Understand, Manage, and Prevent Algorithmic Bias. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4842-4885-0_2

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