Analysing your IQ
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AKA: "Ostrich Effect"
The tendency to underestimate the likelihood of disasters and their potential effects.
Normalcy Bias affects everyone, including (especially) people who think they're immune. The first step to fixing it is understanding how it works.
You assume the economy, your health, or your company will continue as usual. You don't prepare for disruption.
Normalcy Bias isn't just an abstract concept—it affects real decisions about money, relationships, career, and health. The cost of ignoring it compounds over time.
This error is driven by The brain uses the past as a template for the future; unprecedented events are hard to imagine..
This bias exists because human brains evolved for survival, not accuracy. The brain uses the past as a template for the future; unprecedented events are hard to imagine. served our ancestors well. In modern contexts, it often misfires.
In investing: Normalcy Bias leads to holding losing positions too long or selling winners too early.
In relationships: This bias causes people to interpret ambiguous signals in ways that confirm existing beliefs about partners.
In work: Normalcy Bias makes it harder to update strategies when market conditions change.
In health: People ignore symptoms that contradict their self-image as "healthy" or "young."
Normalcy Bias has been studied extensively since the cognitive revolution. Research consistently shows that even warned subjects fall for it—awareness alone doesn't provide immunity.
Run pre-mortems: "Assume this fails catastrophically. Why?" Build contingency plans for unlikely but high-impact events.
Seek disconfirming evidence: Actively look for data that challenges your current belief.
Use decision journals: Write down predictions before outcomes are known, then review accuracy.
Consult diverse perspectives: People with different backgrounds spot different biases.
Implement decision rules: Pre-commit to criteria before emotionally charged situations arise.
Time-box decisions: Revisit important conclusions after a cooling-off period.
Some brains are more susceptible to this than others. Test your Discipline to find out.
The tendency to underestimate the likelihood of disasters and their potential effects.
The alternate name "Ostrich Effect" captures the intuitive essence of the bias. Normalcy Bias is the formal psychological term, while "Ostrich Effect" describes what it feels like in practice.
Run pre-mortems: "Assume this fails catastrophically. Why?" Build contingency plans for unlikely but high-impact events.
The underlying mechanism is the brain uses the past as a template for the future; unprecedented events are hard to imagine.. Human brains evolved heuristics for speed and survival, not accuracy in modern contexts.
Yes. Intelligence doesn't provide immunity—sometimes it makes the bias worse because smart people are better at rationalizing. Awareness and structured decision processes are more protective than raw IQ.
You assume the economy, your health, or your company will continue as usual. You don't prepare for disruption.