7 Psychological Biases That Explain Every Bad Business Decision Ever Made

Availability Heuristic: The Trap of Recent Events

The availability heuristic is a mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic or decision. In business, this can result in decisions being disproportionately influenced by recent events or easily recalled information, rather than a comprehensive analysis of all relevant data. For instance, a recent economic downturn might lead executives to become overly cautious, ignoring long-term growth opportunities. To avoid this bias, businesses should focus on data-driven decision-making processes that prioritize comprehensive historical analysis over recent, memorable events.