1. I am right, you are wrong: Confirmation Bias
People use information to justify their point of view. For example, Sachin Tendulkar’s Test average over the last two years is lower than Rahul Dravid’s and VVS Laxman’s, both now retired. So, he too should retire. But his supporters compare him with Sehwag and Gambhir. The former has a marginally higher average, the latter a lower one. Therefore, Sachin is the best we’ve got, and he should not retire! One way to avoid this bias is to talk to someone you respect and who can express a dissenting opinion.
2. Order in disorder: Central Limit Theorem
You walk into a party and find people talking in a variety of languages. What are the chances that about 66 percent would be using a particular language? Or, that about 60 percent of customers in a store picked a white or a blue pinstriped shirt? The chances are very high for both. The Central Limit Theorem says, roughly, that even seemingly random phenomena when observed long enough will tend to group itself into a bell curve-shaped pattern.
(This story appears in the 11 January, 2013 issue of Forbes India. To visit our Archives, click here.)