Cognitive biases are systematic errors in judgement that affect us all. Since the brain uses a great deal of energy, it constantly tries to optimise wherever it can. Rather than examining every piece of information properly when making decisions, the brain falls back on mental shortcuts and heuristics to arrive at an answer quickly.
In everyday life, this works well. But occasionally, it produces flawed judgements. Because these errors follow certain patterns, researchers can study them, which makes them useful in branding and marketing.
This article compiles a list of 25 cognitive biases that influence consumer behaviour. All brands work with these patterns, whether they intend to or not. Understanding them allows you to present information in a way that helps people make better decisions.
You can also use the same knowledge to push someone into a decision they later regret. The difference between using and exploiting these biases comes down to whether the customer is still satisfied with their decision afterwards.
1. Action bias
When confronted with uncertainty, people would rather act than wait, even though waiting would produce a better outcome. Movement gives people a feeling of control that they lack when standing still.
Bar-Eli et al. (2007) analysed 286 penalty kicks and found that goalkeepers dived left or right in around 94% of cases. The ball stayed in the centre third often enough that standing still would have saved more shots, though the keepers who did stay were too few to be sure.
Where you’ll see this
People close and reopen a slow-loading website, or hit refresh on a payment that’s still processing. Neither helps, but doing something is easier than waiting. For a brand, this means that impatience is the default mindset. Anything unclear, slow, or hard to follow gives people a reason to act, and the easiest option is usually to leave.
2. Ambiguity effect
People avoid options whose probability they cannot judge. When faced with a choice between a known and an unknown risk, most people opt for the known risk, even if it’s the worse deal. The unknown feels more difficult to accept than an unpleasant but certain outcome.
Baymard Institute’s checkout research finds that unexpected extra costs are the biggest reason people abandon a cart. Their survey puts it at 48%, but most of those were only browsing. Among the shoppers who would have bought under different conditions, it’s 39%.
Where you’ll see this
This is why vague pricing pages lose people. “Contact us for a quote” is an unknown to your potential client and can lose to a visible price, even if it’s higher. The same goes for shipping costs, delivery times, or what’s included in your offer.
3. Anchoring bias
We rely heavily on the first piece of information we encounter, and we measure everything after it against that starting point. This is anchoring bias, and it works even when the first number is random.
Tversky and Kahneman (1974) spun a wheel of fortune in front of students at the University of Oregon. The wheel was rigged to stop at either 10 or 65. They then asked what share of UN member states are African. Students who had seen 10 guessed 25% on average; those who had seen 65 guessed 45%. They had watched the wheel spin and knew the number meant nothing.
Where you’ll see this
Every price you show anchors the next one. Airlines price first class so high that hardly anyone books it, which makes premium economy look like good value. Car dealerships show you an expensive model first so the next one seems like a bargain.
But it doesn’t only work for numbers. When you call something an investment, the figure reads differently than if you’d called it a fee. The same goes for how you describe the work itself. A project or a quick favour sets a different expectation before you name a price.
4. Availability heuristic
People tend to judge the likelihood of something based on how easily examples come to mind. Recent and widely publicised events seem more probable than they actually are, while lesser-known risks seem rarer.
After a major crash, people overestimate the risk of flying. According to the National Safety Council’s 2024 figures, the lifetime odds of dying in a car crash are 1 in 101. Flying doesn’t come close, but it feels like it does when a crash is reported in the news.
Where you’ll see this
A brand that pops up everywhere often feels bigger than it is because people judge how established you are by how easily they can remember seeing you. This can work in your favour when you’re a small business. It can also work against you, for example, after a negative review. A vivid complaint is easier to recall than fifty satisfied customers, so it carries more weight than it should.
5. Bandwagon effect
People often adopt something simply because others already have. Researchers have studied this cognitive bias since the 1940s, and the findings have been mixed. The effects are usually small.
In an online experiment, Farjam (2021) asked 1,113 participants to vote on political questions. Some saw the poll results before voting, while others didn’t. Among those who had seen the polls, the option already in the majority got another 7% of the vote, and that held across different voting systems, topics and political attitudes.
Where you’ll see this
Small brands are at a disadvantage here, because visibility compounds. Those who already have plenty of customers gain more just by having them. This is why a small group of visibly enthusiastic customers is worth more than a large claim.
6. Base rate neglect
A good story tends to outperform boring statistics. When we hear a detailed account of a particular case, we stop wondering how common it actually is.
Kahneman and Tversky (1973) described a man who was tidy, methodical and meticulous, then asked whether he was more likely to be an engineer or a lawyer. Some participants were told the group was 70% engineers; others, 30%. Both groups answered much the same way, even though for half of them an engineer was the statistically less likely option. They went with the description and ignored the numbers.
Where you’ll see this
One detailed review outweighs your average rating, no matter how good it is. The same goes for your own decisions. A single client who complained about your pricing feels more real than the twenty who paid without comment.
7. Cognitive dissonance
Holding two conflicting beliefs is uncomfortable, so we adjust one of them to avoid the resulting tension. We usually abandon the belief we have not yet made public.
Festinger and Carlsmith (1959) had participants spend an hour on a deliberately tedious task, then paid them to tell the next person waiting that it had been interesting. Some got one dollar for the lie, others twenty. Afterwards, the researchers asked how much they had actually enjoyed the task. The group paid twenty dollars said it was boring, and they had lied for the money. The group paid one dollar said they had quite enjoyed it. One dollar wasn’t reason enough to lie, so they revised the memory instead.
Where you’ll see this
This is why sending a post-purchase email pays off. Someone who just spent money looks for reasons to feel right about it—and you can give them those reasons.
8. Confirmation bias
Confirmation bias is the tendency to interpret information in ways that confirm our existing beliefs and values. We notice and remember information that fits our preconceptions, while filtering out information that doesn’t before we consciously process it.
Wason (1960) gave 29 students the sequence 2, 4, 6 and asked them to work out the rule behind it. They could test as many sequences as they wanted. Most decided the rule was “even numbers going up by two”, and from then on only tested sequences that matched that guess. The actual rule was much broader, since the numbers just had to count up, and only six of the 29 found it without getting it wrong first.
Where you’ll see this
Brand research done by the founder tends to confirm what the founder already thought, because the answer shaped the questions. And once someone has decided you’re too expensive, every detail on the page becomes evidence for it.
9. Curse of knowledge
Once you know something, you can’t imagine what it’s like not knowing it. In other words, your understanding of a subject shapes your perception of how much other people understand.
Newton (1990) asked participants to tap the rhythm of a well-known song on a table, while someone else listened and tried to name it. Tapping feels obvious when you do it, because you hear the song in your head while your finger moves. The listener hears knocking. The tappers predicted that about half the songs would be guessed. Of 120, listeners named three.
Where you’ll see this
This is why founders who write website copy themselves can make it hard to understand. You’ve been familiar with your offering for years, so every term is obvious to you. What you think is a clear explanation might assume knowledge your visitor doesn’t have. To avoid this, you could ask someone outside your field what they struggled with.
10. Decoy effect
Adding a third option that’s deliberately worse changes which of the other two people pick. The decoy isn’t intended to be sold but to make one of its neighbours look like the sensible choice. Huber, Payne and Puto (1982) first demonstrated it and called it the attraction effect.
Dan Ariely tested it with a subscription offer from The Economist. Online only cost $59, print only $125, and print plus online also $125. Of around 100 students, 84% took the combined subscription, while without the print-only option on the page, only 32% did, and most switched to the cheap online option.
That demonstration was never published as a study, and the effect is less reliable than it suggests. Frederick, Lee and Baskin (2014) ran 91 attempts across 23 product categories and got 11 reliable effects. It worked when options were reduced to numbers, but not once products were described in words or shown as images.
Where you’ll see this
The print-only tier made the combined one look free, because it cost the same and offered less value. That’s the logic behind most three-tier pricing, and the reason people warn you against removing a tier that sells badly.
A pricing page describes what’s included in words, which is where the effect stops working. So a third tier earns its place if it helps people work out which one they need.
11. Empathy gap
We can’t accurately imagine how we would feel in a different state. Loewenstein (1996) called this the empathy gap. When you’re calm, you underestimate how you’ll feel when you’re anxious. The same applies to other people. It’s difficult to judge what someone in a different state needs.
Read and van Leeuwen (1998) let office workers pick a snack they would be given a week later, either just after lunch or late in the afternoon. Those who chose on a full stomach picked fruit for their future selves. Those who chose while hungry picked junk food. When the day came, most of them wanted the junk food regardless.
Where you’ll see this
Copy gets written in a quiet room by someone who knows the product inside out, for a reader who is distracted, sceptical and three tabs deep in a comparison. You can’t close that gap by trying to empathise more, because you can’t reason your way into a state you’re not in. It closes by talking to the target audience instead of imagining them.
12. Endowment effect
Owning something raises what you think it is worth. The valuation changes simply because it’s in your possession, even though nothing about the object itself has changed.
Kahneman, Knetsch and Thaler (1990) gave half a group of students a university mug and asked what they would sell it for, while asking the other half what they would pay. They found that sellers wanted roughly twice as much as buyers offered.
Plott and Zeiler (2005) later showed the gap can disappear when participants are trained on the procedure first, so it is unclear how much of it is preference and how much is confusion.
Maddux et al. (2010) found the bias is stronger in individualistic cultures like the West, where self-enhancement is more common, compared to collectivistic cultures like those in East Asia.
Where you’ll see this
For anyone selling their own work, this can be expensive. You created it and know every detail, which can inflate your perception of its market value. The same applies in reverse when you hold on to a product or service that is no longer viable, because dropping it feels like a loss.
13. Framing effect
The same fact reads differently depending on how you frame it. Juice labelled 90% natural and juice labelled 10% artificial contain the same thing. Yet people still judge the first as better quality. Nothing about the product has changed, but it feels different.
Guinness is a good example. The beer takes 119.5 seconds to pour, by the brand’s own account, which is much longer than a lager. Instead of speeding it up, Guinness made the wait the point. The campaign “Good things come to those who wait” turned the slow pour into proof that it was being done properly, so the wait became a reason to order one.
Volkswagen and Avis went a step further and rebuilt the whole position around the drawback. The “Think Small” campaign sold a small car to a market that saw small cars as a cheap compromise, and “We try harder” turned coming second in the rental business into an argument for choosing Avis.
Where you’ll see this
You frame your own work in a certain way, too. A builder who says “we finish one site before starting the next” and one who says “we can’t start until August” are describing the same schedule, but the first sounds like a strength and the second like a drawback. Though it only works if it’s true.
14. Halo effect
If people like one thing about a person, a product or a brand, they often assume other aspects are good too. Someone attractive might be credited with being competent and kind. A product that looks well made seems to work better, last longer and come from a company that treats its staff decently—even when none of it is true.
Nisbett and Wilson (1977) filmed the same lecturer twice, once warm and friendly, once cold and distant, and showed one version to each half of 118 students. The students who saw the warm version liked his appearance, mannerisms, and accent. The students who saw the cold version found the same accent irritating.
Afterwards they denied that his likeability had anything to do with it. They believed his accent and his manner had shaped their opinion of him, when it had worked the other way round.
Where you’ll see this
This is why a well-crafted brand identity and website are a good investment. They let the same offer read as more capable. The same goes for packaging. When done well, it signals quality.
The opposite is also true, and it’s called the horn effect. A pixelated logo or a website that breaks on a phone makes people doubt the work behind it. That’s why cheap brand collateral usually costs more than it saves, which I go into in more detail in my article on the halo effect in branding.
15. IKEA effect
People value things more highly when they have put work into them, and the value rises with the effort spent.
Norton, Mochon and Ariely (2012) had participants fold origami, assemble IKEA boxes and build Lego sets, then bid on their own work alongside work made by other people and experts. The builders consistently priced their amateurish creations at roughly what the experts’ work went for, and they expected neutral observers to see it the same way. The observers did not. The effect appeared only after the task was finished. Participants who destroyed their creations or gave up halfway showed no attachment.
Where you’ll see this
For a service business, this is an argument against the big reveal. When the architect sketches at the table while the client talks through what they need, the client has put something into the house and stays attached to it. When the architect takes the brief away and comes back with a finished house, the client will be less invested.
16. Loss aversion
Losing something hurts more than gaining something of the same value, by a factor of roughly two in the original estimates. The exact amount depends on the context and the stakes involved.
Thaler and Benartzi’s (2004) Save More Tomorrow programme asked employees to commit part of their future pay rises to their pension, so that it never felt like a loss. Among those who joined, savings rates rose from 3.5% to 13.6% over forty months. Nobody was randomly assigned, so the people who signed up may have been the ones inclined to save anyway.
The programme also leans on inertia as much as loss aversion. In fact, Gal and Rucker argued that the research on loss aversion is much less robust than previously thought. The bias doesn’t appear at all in many studies.
Where you’ll see this
Guarantees, trial periods, and clear cancellation terms all address the same fear. Ecosa turned it around by giving me 180 days to return my new mattress. I never took them up. Almost ten years on, I’ve bought a second Ecosa mattress and a set of bedding, and talked friends into buying one too. Without that trial period, I probably wouldn’t have bought the first one.
The same bias stops businesses from investing in their brand. Saving $3,000 on a brand identity is a gain you feel today. But the rebrand it costs you in five years is a loss you can’t feel yet, so the saving feels like the more sensible option.
17. Mere exposure effect
The more often people come across something, the more they tend to like it, just because they’re more familiar with it.
Zajonc (1968) showed participants invented Turkish-sounding words, some once and some up to twenty-five times. When he later asked whether each word meant something good or bad, the words people had seen most often were rated most favourably, although nobody knew what any of them meant. A meta-analysis of 208 experiments found the effect reliable across stimuli.
Where you’ll see this
That’s why consistency is so important in brand-building. A brand that uses the same colours, typography and voice repeatedly will naturally become more likeable.
This is partly why distinctive brand assets work. Repetition teaches people to recognise a colour or shape as yours, and it also makes them like it. Every redesign gives up part of what you built. So if you have a small marketing budget, showing up consistently over years beats one big campaign.
18. Noble edge effect
People judge brands they see as ethical more favourably, and that judgement spreads to things that have nothing to do with ethics—which is a variation of the halo effect.
Büttner, Gassler and Teuber (2024) showed 1,010 people packaged foods, either plain or carrying an Eco-Score of A, C or E. The score rates only environmental impact, but, unsurprisingly, it also changed how people judged taste and healthiness. The effect was stronger in the negative direction. An Eco-Score E made the same product seem less tasty, less healthy and less worth buying.
Where you’ll see this
An ethical position changes how everything else about you is judged, including aspects that have nothing to do with it.
That means it’s easier to lose than to win here. Vague sustainability claims might read as evidence that you don’t care.
On top of that, EU rules on green marketing claims are tightening, so vague claims are becoming a legal risk as well as a trust issue. You can read more about this in my article about sustainable branding.
19. Paradox of choice
Past a certain point, more options make a decision harder instead of easier. People take longer, choose less often, and regret their choices more.
The famous jam study is often cited as proof. But Scheibehenne, Greifeneder and Todd (2010) pooled 63 conditions from 50 published and unpublished experiments, just over 5,000 participants, and found a mean effect close to zero. They found that several conditions seem to matter, including whether the buyer already knows what they want, though none turned out to be a reliable predictor.
Where you’ll see this
A returning client knows what they want and can handle everything you offer on your service page. A first-time visitor might struggle, but they’re the one you built the page for. The clearer your positioning, the more focused your offer can be and the easier it is for a first-time visitor to understand.
The paradox of choice is also why new brands often launch with one product or a single service. Fewer options are easier for people who have never heard of you to grasp.
20. Peak-end rule
People remember an experience by its most intense moment and by how it ended, while the average and the length of the experience are remembered less.
Redelmeier, Katz and Kahneman (2003) assigned 682 colonoscopy patients either to a standard procedure or to one extended by a few extra minutes of milder discomfort at the end. The extended group had a longer, objectively more uncomfortable procedure, but remembered it as less unpleasant.
Where you’ll see this
This finding can help you optimise your process. Find the peak, usually the first time someone uses your product, and fix the ending, which for most service businesses is the handover and invoice.
People will remember whatever you write last, so make sure you give them a clear invitation to take the next step.
21. Primacy effect
The first thing people encounter has more impact than anything that follows, and everything that comes afterwards is interpreted in light of that initial impression.
Asch (1946) read participants a list of six traits describing a person: intelligent, industrious, impulsive, critical, stubborn, envious. A second group heard the same six words in reverse order. The first group understood it as a capable person with a few flaws. The second described a difficult person who happened to be clever.
Where you’ll see this
This means the first slide of your presentation or the first sentence you say shapes what people think of your work.
If your homepage opens with your prices, everything after that will be read as justification. If it opens with your work, people have something to measure the price against.
The end of a list is also easy to recall, which makes the middle the weakest position. That’s why you shouldn’t put anything you want people to remember there.
22. Priming effect
Coming across one thing changes how people respond to the next, without anyone noticing the connection. For example, reading the word lemon makes people think ‘yellow’.
Brasel and Gips (2011) got participants to race identical cars in a driving game. The only difference was the car’s branding, including Red Bull. They found that lap times in the Red Bull car were at both extremes, much faster or much slower, because the same aggression that produced quick laps also caused crashes. When asked afterwards, the players had no idea that the branding had affected their driving.
This comes from one paper, and behavioural priming has a poor replication record.
Where you’ll see this
This is what people mean when they say a brand has a particular feel. In the food category, green stands for healthy because it has been used with healthy products for years.
But be careful. Whatever your brand signals, you’ll attract more of it. If everything you publish signals cost consciousness, you’ll attract clients who are shopping on price.
23. Salience bias
People pay attention to whatever stands out, not what matters most. Something might look important because it’s vivid, unusual, or simply in front of you.
Attari et al. (2010) asked 505 people to estimate how much energy various household activities use. Participants underestimated by an average factor of 2.8. When asked what single thing would save the most energy, the most common answer (20%) was turning off the lights. Replacing an appliance saves far more, but switching off a light is something you see yourself doing every day.
Where you’ll see this
Brands use this on purpose by putting one striking feature up front, like distinctive packaging or a memorable tagline. Creating salience doesn’t have to cost a lot. A café owner might just put chairs out on the pavement so the place looks open and busy from across the street.
24. Spotlight effect
People tend to overestimate how much others notice them. In reality, fewer people are paying attention than you think.
Gilovich, Medvec and Savitsky (2000) sent students into a room of their peers wearing a T-shirt with Barry Manilow’s face on it, then asked them to estimate how many people could say who was on it. The wearers guessed around 46%, while only about 23% could.
Where you’ll see this
Many small business owners rewrite a post four times, or never send a written newsletter at all, because it might not sound perfect. Nobody is watching that closely. Most people will scroll past, and the few who stop won’t remember your small mistakes.
25. Status quo bias
People like to stick with what they have, even when something else would suit them better. Whatever is already in place counts as normal, and any change feels risky.
Samuelson and Zeckhauser (1988) gave participants a questionnaire with invented scenarios. In one version, the options stood side by side. In the other, one of them was described as what the person already had. This option was chosen more often. They found the same pattern in how university staff picked their health and pension plans.
Four of their scenarios repeated decades later, and three held up.
Where you’ll see this
Your competitor is often not another supplier but the decision to leave everything as it is. It applies to new customers weighing the effort of switching to your brand, and to existing ones, where the same inertia works in your favour and prevents cancellations.
If you want somebody to switch, make the cost of doing nothing visible. Show them what they will lose by not changing.
Frequent questions about cognitive biases
What is a cognitive bias?
A cognitive bias is an unconscious error in our thinking. This happens because our brains constantly try to interpret a complex world quickly and with minimal effort. While this mental shortcut helps us navigate daily life, it can also cause us to misjudge information and make irrational decisions.
Why do cognitive biases exist?
Cognitive biases save energy. The brain uses a high proportion of the body’s energy, so evaluating every piece of information carefully would be too slow and costly for most situations. Mental shortcuts get to a reasonable answer quickly, and for most everyday decisions, they are accurate enough. The errors they produce are the price we pay for that speed.
Are cognitive biases the same as heuristics?
Not quite. A heuristic is a mental shortcut, such as judging how likely something is based on how easily examples come to mind. A cognitive bias is the predictable error produced when this shortcut fails, such as overestimating the risk of flying after a crash appears in the news. In other words, heuristics are the methods, and biases are the errors they can cause.
Can you avoid cognitive biases?
Not entirely. The filtering happens before you think about it, which is why the wheel of fortune still worked on people who saw it spin. Knowing the name of a bias does not switch it off. What helps is putting a few measures in place, such as getting a second opinion from someone with no personal stake in the matter, or sleeping on a decision that feels urgent for no obvious reason.
Last words
These biases and heuristics influence the decisions your customers make about your brand. They can help you set your prices or decide the order in which you present information.
That said, some of the best-known principles for shaping customer behaviour aren’t on this list. Social proof, scarcity, authority and reciprocity are psychological principles of persuasion rather than errors in judgement, which is why I cover them in my article about Cialdini’s principles of influence.
If you want to apply these cognitive biases to your own business, a good place to start is in your brand messaging. If you’re interested in a related case study, you might like how Ogilvy used psychology to increase KFC’s french fry sales by 56%—a translation I made for InsideBE.
Title image by cottonbro studio
