The problem of people falling for falsehoods has become an urgent issue in recent years, as new technologies have conspired with sociopolitical currents within the culture to spread misinformation at unprecedented speed and reach. Psychologists who study this issue have focused mainly on individual vulnerabilities: the cognitive quirks and biases that predispose us to believe falsehoods, buy into lies, and give in to speculation.
Thinking forward is an automatic process. Cause, then effect. Input, then output. A to B. It feels logical-and normal to start with a conclusion, then find justification around it.But we can always take our thinking a step further. Sometimes, the best way to get the answers you want is to think backwards. It's called mental inversion. Turn the whole thinking process upside down. As the great algebraist Carl Jacobi said, "Invert, always invert."
Everyone employs bias-otherwise known as cognitive shortcuts-in their lives every day. Imagine you're scrolling through your social media feed and immediately dismiss a news article because it comes from a source you don't typically trust. Or maybe you're convinced your favorite restaurant is the best in town, remembering all the great meals you've eaten there while forgetting that mediocre dinner last month.
The investment decisions people make are often influenced by cognitive biases that can lead to irrational decisions or behavior contrary to personal financial goals. Cognitive biases, like the status quo bias, showcase a tendency to prefer existing circumstances over change.