Cognitive biases in marketing and everyday life, with examples, books and research

A cognitive bias is a systematic or systemic natural error in human thinking that occurs when people process and interpret information around them in a way that illogically affects their decisions. Cognitive biases shape the human mind in fascinating ways and often lead us to wrong conclusions and less than optimal decisions. It is no surprise, then, that both traditional and digital marketing, which try to influence purchasing decisions, have embraced cognitive biases and use certain patterns in our behaviour. Cognitive biases are a fascinating field. Knowing about them allows us to defend ourselves against them and, on the other hand, to use them to our advantage.

Knowing about cognitive biases is also great for understanding and interpreting everyday situations and behaviour. After reading 3 recommended books and many examples of individual cognitive biases, hardly a day goes by without me coming across an example. And thanks to this knowledge, you can avoid mistakes, or perhaps make a mistake on purpose 🙂

The concept of cognitive biases was first introduced by Daniel Kahneman in 1972. Since then, researchers have described many different types of biases that affect decision-making in a wide range of fields, including social behaviour, cognition, behavioural economics, marketing, education, management, business, negotiation and finance.

There are many interesting books on this topic, and they overlap in various places. I have read and can recommend these three.

Do cognitive biases affect everyone?

Put simply, yes, but the degree varies greatly. Cognitive biases show up in every person, but people’s experience, personality and knowledge of these biases can strongly influence their impact.

How to reduce the effect of cognitive biases on your own decisions

You cannot switch cognitive biases off. They are part of how your mind saves energy. You can, however, slow down at the moments when a biased decision would cost you the most. These habits help.

• Delay larger decisions. Before you commit to something sizeable, such as a 500 EUR purchase or a new supplier, sleep on it. The pause gives slow, deliberate thinking a chance to check your first impulse.
• Set your own reference point first. Decide what something is worth to you before you look at the seller’s price. That way, their number does not become your anchor.
• Look for evidence against your view. Ask yourself what would have to be true for you to be wrong, then go and check it.
• Turn the frame around. If an offer says “9 out of 10 succeed”, read it as “1 in 10 fails” and notice whether your feeling changes. If it does, the frame was doing the work, not the facts.
• Ask about the people you cannot see. When a success story looks like a recipe, ask how many people tried the same thing and failed.

Individual cognitive biases

Let’s take a closer look at a few basic cognitive biases.

1. Anchoring ⚓

This cognitive bias is extremely easy to understand, and you can use it almost every day. Anchoring stems from the tendency to rely too heavily on the first piece of information you learn (for example, about a price). If you learn that the average price of a holiday in Africa is 100,000 CZK (about 4,100 EUR), you will think that any amount below this is a good deal. If you then consider such a holiday, this amount will already be fixed in your mind. You can use other people’s bias to set expectations by being the first to put a piece of information on the table (the information can be far from reality). In this case, it is important to realise that there is no such thing as a correct or objective price.

What is really interesting is that anchoring works even when the information thrown out has nothing to do with the decision in question. The books mentioned in the introduction describe an experiment in which participants spun a wheel to get a random anchor number between 0 and 100. This random number had no connection to the second part. The volunteers were then asked to adjust this number up or down to estimate how many African countries are in the UN. Those who spun a high number gave significantly higher estimates than those who spun lower numbers. Nobody knew the exact number, so in every case the participants used the original number as a reference point for their decision.

Example: Imagine you are negotiating a pay rise with your boss. You may hesitate over what first offer to make, but research on anchoring suggests that whoever puts their cards on the table first may have the advantage. So you name a figure, which then becomes the anchor, the starting point for all further negotiations. If you want a 20% pay rise, it may not be a mistake to ask for 40%. This tips the negotiation in your favour, because your first offer has set the range of acceptable counteroffers. All further offers will use this initial figure as an anchor or central point. Of course, you must not overdo it completely.

Personally, I tested anchoring most in Thailand and Bali, where haggling over prices is common. If someone in Thailand tells you they want 600 baht for a T-shirt, they will often settle for 200 to 250. So if a seller told me 600 baht, I tried to keep walking and not react to the price for a while. The seller then usually called out a lower price, and I would say 200 baht. The price could often be easily haggled down to half. It is also interesting to name a price first: instead of asking for the price, just fire off a very low one straight away. The seller then responds with a significantly adjusted price, and you have the advantage described in the example above.

2. Confirmation bias ✅

Confirmation bias favours information that confirms your existing attitudes, beliefs or prejudices.
Imagine, for example, that some people believe Asians are better at maths than others. These people then see a brilliant Asian person on TV who has won a chess tournament while solving word problems and catching Pokémon on their phone. These people simply explain it with this shortcut, which confirms what they already believe. There are also different types:

Biased attention: This is when we selectively focus on information that confirms our views, while ignoring or downplaying data that does not. We simply say that the exception proves the rule.
Biased interpretation: In this case, we deliberately interpret information in a way that confirms our beliefs.
Biased memory: This is when we selectively remember information that confirms our views, while forgetting or downplaying information that does not.

3. The Dunning–Kruger effect 🙋‍♂️

People with low ability lack the skills needed to recognise their own incompetence. The combination of poor self-awareness and low cognitive ability leads them to overestimate their abilities.
The basic idea of the Dunning–Kruger effect is that if you do not know something, you do not even have the ability to recognise that you do not know it. It is actually the opposite of the wise quote by Socrates that I remember from my first year at university: “I know that I know nothing.”

Fools are often blind to their own foolishness. As Charles Darwin wrote in his book The Descent of Man: “Ignorance more frequently begets confidence than does knowledge.” In this case, it really is true.

Dunning and Kruger, after whom the effect is named, ran a series of experiments to confirm it. For example, they asked 65 participants to rate how funny other people would find various jokes. Some participants were exceptionally bad at judging what others would find funny, yet these same participants described themselves as excellent judges of humour.

4. Loss aversion 💎

Loss aversion describes how we fear a loss much more than we value gaining something of equal worth. For example, losing 1,000 CZK (about 41 EUR) frustrates us more than earning an extra 1,000 CZK (about 41 EUR) pleases us.

A classic loss aversion tactic used by retailers is giving shoppers free coupons. Once you give people a 100 CZK (about 4.1 EUR) discount voucher, they feel that this supposed saving belongs to them. And if you threaten to take it away, people automatically feel they are losing something that is rightfully theirs. In the Czech Republic, you will find these coupons on many online shops as banners or as incentives to sign up with your email.

The same thing happens when a free trial ends. Users feel they are about to lose something they have used for the past month, so it is harder to give it up. Thanks to loss aversion, you are far more likely to turn free trial users into paid subscribers than to convert users who have never used your software before.

5. Bandwagon effect 🐑

The bandwagon effect helps explain why people queue for days to buy an iPhone they do not need. Or why people take out pension plans when they could just as easily (and more safely) save the money themselves. It also explains why the price of bitcoin and some shares shot up and then crashed again within a single year.

The bandwagon effect is behind all of it, and it is the same reason brands spend huge sums on celebrity faces to promote their products.

When a consumer product becomes as fashionable as the iPhone, people buy it purely for the bitten apple logo. In the fashion industry, this irrational behaviour is even more noticeable.

6. Halo effect 🗣️

The halo effect is a cognitive bias in which our first impression shapes how we interpret further information about things or people. That is why a great company with a poor-quality website will struggle to sell more online than a poor-quality company with a great website.

As soon as people land on a page, they make a quick judgement about each brand, and that judgement shapes everything they learn about it afterwards.

This is also why it is so important to get right the first marketing message users see when they discover your brand for the first time. It has a huge influence on how they will perceive your brand in every interaction that follows. And do not be afraid to focus on specific niches.

7. Survivorship bias 🔫

Survivorship bias is a cognitive shortcut that occurs when a successful subgroup is mistaken for the whole group because of the invisibility of the unsuccessful subgroup. The name of this bias comes from the error a person makes when they consider only the “survivors” in a data set and exclude the majority that did not survive. Survivorship bias is one of the most popular cognitive biases, thanks to many real-world fatal examples. Let us look at some of them.

Looking at successful start-up founders such as Steve Jobs, Bill Gates and Mark Zuckerberg, one might conclude that reaching their level of success only takes having an idea, dropping out of school and devoting time to that big idea. But hardly anyone accounts for the tens of thousands of people who followed a similar path and simply went bust. Forbes magazine states that 90% of start-ups fail fatally, yet Forbes only covers the successful ones, which is why some people come away feeling it describes a clear recipe. Of the thousands of people who try to follow the same path as these business magnates, most do not succeed. Even so, their stories of failure are not shared as widely as the success stories, which gives others a misleading picture.

The term “survivorship bias” was first used by Abraham Wald, a famous statistician known for his study of Second World War aircraft. When Wald’s research group was trying to work out how to better protect warplanes, it initially assessed which parts of the aircraft were most damaged. Having identified the areas in the worst condition, they would then reinforce the aircraft in those places with more protection.

Abraham Wald, however, pointed out that the most damaged aircraft were those that never returned from combat because they had taken fatal hits. Those same aircraft would also have provided the most important information about which parts of the plane needed reinforcing.

Had the research group failed to identify this critical fact, the reinforcements it proposed would have completely ignored the subgroup of aircraft that probably held the most valuable damage data. The results of the study provided an example of how Abraham Wald and his research group at Columbia University overcame survivorship bias and saved hundreds of pilots’ lives.

8. Sunk cost fallacy

The sunk cost fallacy is the natural human tendency to keep going with something we have already invested heavily in (whether time, money, effort or emotional energy), even when it is clearly better to give up and focus on something else. That said, it is often clear only to the people around us.

In economic terms, sunk costs are costs that have already been incurred and cannot be recovered. Therefore, they should not be a factor in current decisions. It is irrational to use irrecoverable costs to justify present decisions and behaviour. If we acted rationally, we would consider only future costs and returns. Whatever we have already invested will not come back to us, whether we go ahead with the decision or not.

The sunk cost fallacy can range from deciding to stay with a current partner even though we are unhappy, because we have already invested years of our life in them, to continuing to spend money renovating an old, damaged house even though buying a new one would be cheaper.

And it does not only affect individuals. In 1956, the Supersonic Transport Aircraft Committee met to discuss building the supersonic Concorde. The project, with costs estimated at almost 100 million dollars, involved French and British engine manufacturers and their governments. The budget was exceeded almost 20 times over. Long before the project ended, it was clear that costs were rising and that the financial returns from the aircraft once in service would not offset them. With a cruising speed of 2,158 km/h and seats for 100 passengers, Concorde was an amazing project, but it made no financial sense. Even so, the project went on. The manufacturers and governments saw it through because they had already put substantial financial investment and a great deal of time into it. In the end, this led to millions of dollars being wasted, and the mere 14 Concordes built ran at a loss and were eventually withdrawn.

Other cognitive biases

There are hundreds of cognitive biases. Here is an overview of others you will most often come across in marketing and everyday decision-making. Each one has its own detailed breakdown on the site, which you can click through to.

Price, value and decision-making

• Anchoring: The first number we see becomes the reference point from which we derive all further decisions. That is why a crossed-out price or “usually 2,999” can make even a higher amount look like a good deal. Whoever states a number first holds the price tag.
• Decoy effect: Adding a third, deliberately less attractive option changes our choice between the two original ones and tilts it towards the target option. The decoy is not meant to sell; it is there only to make the chosen option look like a clear win next to it. A classic of three-tier price lists.
• Framing effect: We decide differently depending on how the same information is presented, even though the facts do not change. “90% fat-free” sells better than “contains 10% fat”, and “for the price of a coffee a day” sounds better than the annual amount. The words set the frame for us.
• Loss aversion: A loss hurts us roughly twice as much as an equal gain pleases us, so we prefer to decide in ways that ensure we lose nothing. That is why free trials and phrases like “don’t miss out” work. Fear of loss is a stronger motivator than the prospect of gain.
• Sunk cost fallacy: We carry on with something just because we have already put money, time or effort into it, even though these are irrecoverable. “I’ve already put so much into it” keeps us in subscriptions and unfinished projects. A sensible decision, however, should be guided only by future benefit.
• Endowment effect: We value things we own more highly than identical things we do not own, and we are reluctant to give them up. As soon as we try a product or take it home, we start to see it as ours. That is why test drives and 30-day trials work.
• Compromise Effect: Faced with three options, we most often choose the middle one, because we see the extremes as risky and the middle as a safe compromise. The cheapest raises fears of poor quality, the most expensive feels wasteful. That is why price lists are built so that the target option sits in the middle.
• Zero-Price Effect: A price of zero attracts us far more strongly than the saving of a few crowns would justify, because the word “free” removes the risk of losing out. Free delivery therefore works better than a discount of the same amount. “Free” is one of the most powerful words in marketing.
• Left-Digit Effect: We judge a price mainly by its first digit from the left, so we see 199 as “a hundred and something”, not nearly two hundred. Prices ending in nine therefore seem much cheaper than they really are. It is the oldest pricing trick, known as psychological pricing.
• Mental Accounting: In our heads we sort money into boxes by where it came from and what it is for, and we treat it differently in each, even though a crown is still a crown. We spend winnings or a gift card more easily than our salary. That is why “for the price of a coffee a day” and cashback work.
• Default Effect: Most people leave a preset option as it is, because changing it takes effort and we see the default as a recommendation. Pre-ticked boxes and automatic renewals quietly steer decisions this way. Whoever sets the default shapes the behaviour of the majority.
• Paradox of Choice: Too many options lead not to happiness but to paralysis and fewer purchases. When there is too much to choose from, we put off the decision or do nothing. Fewer, well-chosen options often sell more.
• IKEA Effect: Because of this bias, people place greater value on objects they have put some effort or time into assembling. Our own work puts a piece of ourselves into the thing, so we value it more. Brands use this through configurators and personalisation.

Social influence and persuasion

• Social Proof: We consider right whatever the majority does, and we take other people’s behaviour as a guide for our own decisions. That is why reviews, customer numbers and “bestseller” labels work. It is strongest with people similar to us and in moments of uncertainty.
• Bandwagon Effect: We join in with something more and more simply because others are joining in, so a trend snowballs by itself. It combines practical trust in the crowd with the wish not to be left out. That is why fashions and viral products spread so quickly.
• Halo Effect: One strong impression, such as appearance or a well-known brand, colours our overall judgement, even of qualities we have never checked. A premium photo therefore raises the perceived quality of the whole product. That is why the first impression of a website matters so much.
• Authority Bias: We give more weight to the opinion of someone we see as an authority and scrutinise it less. A title, a uniform or a confident manner is enough. That is why adverts rely on “recommended by experts” and on the logos of well-known media.
• Reciprocity: When we receive something first, we feel a strong need to return the favour. A free sample, quality content or a gift with a purchase therefore build a sense of obligation before you sell anything. The key is to give value with no strings attached.
• Liking: We find it much easier to say yes to people we like, and we trust them more. Liking is built on similarity, appearance, sincere compliments and a shared goal. That is why brands are given a human face and work with influencers.
• Pygmalion Effect: Our expectations influence another person’s behaviour so much that they end up fulfilling themselves. When we believe someone will succeed, we treat them in a way that helps them succeed. A premium approach creates premium customers.
• Barnum Effect: We take a general statement that fits almost everyone as an accurate description of ourselves in particular. Horoscopes, personality tests and “tailor-made” offers are all built on this. Personalisation works even when it is only apparent.
• Bystander Effect: The more people witness a situation, the less responsible each of them feels to act. Responsibility dissolves in the crowd and in the end nobody does anything. That is why generic calls to action fail and personal appeals work.

Scarcity and urgency

• Scarcity: We place higher value on things that are rare or harder to get, and we want them more. Limited availability acts as a signal of quality and triggers the fear of missing out. “Last items” and limited editions therefore almost sell themselves.
• FOMO (Fear of Missing Out): The fear of missing out drives us to act quickly and impulsively. Countdowns, “offer ends today” and “last places” target exactly this feeling. We do not buy because of the product but because we are afraid of missing out.
• Veblen Effect: For status goods, demand rises with price, because a high price signals prestige and social standing. People pay not just for the product but for the message it sends about them to others. That is why discounts tend to hurt luxury brands.
• Streisand Effect: Trying to hide or ban something often attracts far more attention than doing nothing at all. Forbidden fruit and censorship spark both curiosity and defiance. In crisis communication, silence therefore sometimes works better than eager deleting.

Memory, attention and perception

• Peak-End Rule: We judge a whole experience mainly by its most intense moment and by how it ended, not by the average. One bad ending can outweigh a lot of good. That is why it pays to perfect the unboxing, the checkout and the handling of complaints.
• Mere Exposure Effect: We like things we know simply because we have come across them before, even without any further information. The more often we see a brand, the more likeable and trustworthy it seems. That is why brands are built through repetition and consistency.
• Illusory Truth Effect: A claim we hear repeatedly starts to seem true, even when it is not. In our heads, repetition quietly replaces evidence. Advertising slogans are built on this, and so is the power of disinformation.
• Availability Heuristic: We give more value to information that comes to mind quickly. We give this information more weight and tend to overestimate the likelihood that similar things will happen in the future. That is why we fear things from the news more than those that actually threaten us much more often.
• Serial Position Effect: From a longer list we best remember the beginning and the end, while the middle slips away. The first items have time to sink in, and the last ones are still fresh in our minds. That is why the most important things belong at the edges, not in the middle.
• Distinctiveness (Von Restorff Effect): Our mind always remembers far better something that stands out from the rest of its category and gives it more attention, which brands try to use in branding. That is why a bold call-to-action button or a highlighted plan catches the eye before its blending surroundings.
• Zeigarnik Effect: We remember unfinished or interrupted tasks better than completed ones, and they give us no peace until we finish them. An unfinished task creates tension in our heads that wants to be released. That is why progress bars and “complete your profile” prompts work.
• Priming: Introducing or exposing people to one stimulus influences how they respond to the next stimulus. Priming works by activating an association or representation in memory just before another stimulus or task is introduced. This first stimulus influences decision-making ahead of the next stimulus and task.
• Mandela Effect: A large group of people consistently and confidently remember something that never happened or was actually different. Memory does not work like a video camera; it rebuilds and fills in a memory each time we recall it. For a brand, this means people remember its details inaccurately.

Ego, beliefs and self-deception

• Confirmation Bias: We look for and trust information that confirms our view more, and we ignore or question anything that contradicts it. We are not looking for the truth but for confirmation. That is why we read reviews selectively and social media builds bubbles around us.
• Dunning-Kruger Effect: People with little knowledge overestimate themselves the most, because they lack exactly the knowledge they would need to see how little they know. Real experts are the opposite and tend to underestimate themselves. That is why you speak to beginners differently from professionals.
• Cognitive Dissonance: We usually ease the tension between what we do and what we believe with an excuse or a change of opinion, not a change of behaviour. After a purchase, we therefore look for reasons why we made a good decision. This is used in post-purchase reassurance and in retention.
• Overconfidence bias: We are more certain about ourselves and our estimates than our actual success rate justifies. Most people consider themselves above average, which cannot be true for everyone. Free trials and subscriptions rely on this, because we buy into our ideal future self.
• Actor-observer bias: This is the tendency to attribute our own actions to external causes, while attributing other people’s behaviour to internal causes. For example, you put your high cholesterol down to genetics, while in other people high cholesterol is caused by a poor diet and lack of exercise.
• False consensus effect: This is the tendency to overestimate how far other people agree with you and share your views. We subconsciously assume that “most people see it the way we do”, which leads to mistakes when creating customer personas and in targeting.
• Optimism bias: This tendency leads you to believe that misfortune is less likely to happen to you and that you will be more successful than your peers. That is why people underestimate risks, and the marketing of insurance and extended warranties plays on exactly this “it won’t happen to me” mindset.

Probability, risk and judgement

Gambler’s fallacy: We believe that with random events, past results influence future ones, for example that after a run of black, red must come up next in roulette. But chance has no memory, and the probability of each subsequent attempt stays the same. A large part of gambling is built on this mistake.

Survivorship bias: We judge by those who succeeded and overlook those who failed, because they are no longer visible. This skews the sample and makes recipes for success misleading. We only see the winners, not the thousands for whom the same approach did not work.

Note: This is educational content with no commercial promotion or value.

How to use cognitive biases in marketing responsibly

With my clients, I treat biases as a way to remove friction from a decision the customer already wants to make, not as a way to push them into one they will regret. A simple process works well.

• Map the decision. Walk through your customer’s path from first contact to purchase and note where people hesitate or leave.
• Match the bias to the friction. If people are unsure whether you can be trusted, social proof helps. If they freeze in front of your offer, fewer options help. If the price feels high, a clearer frame helps.
• Change one thing at a time. Test a single change and measure its effect before adding another, otherwise you will not know what worked.
• Check that every claim is true. A bias amplifies a message. It should never replace honest content.

Common mistakes with cognitive biases in marketing

• Fake scarcity and urgency. Countdowns that restart on every visit or “last items” that never run out work once. Customers notice, and trust is hard to rebuild. Consumer protection rules in the EU and many other places also prohibit misleading commercial practices.
• Stacking every trigger on one page. A banner, a timer, a pop-up, a discount and a stock warning all at once feel like pressure. The page starts to look untrustworthy rather than persuasive.
• Copying tactics without context. What nudges an impulse purchase in an online shop can backfire in a long business sale, where buyers compare options carefully and dislike being rushed.
• Forgetting your own biases. Marketers fall for them too. Confirmation bias makes you read test results in favour of the idea you liked, and survivorship bias makes you copy a competitor’s campaign without knowing whether it actually worked.

Frequently asked questions about cognitive biases in marketing

What are cognitive biases in simple terms?

Cognitive biases are predictable errors in thinking that happen when your mind takes shortcuts to process information quickly. They are not a sign of low intelligence, because they affect everyone. They simply lead you to judgements that are not fully logical.

Is there a complete list of cognitive biases?

No single official list exists. Researchers have described hundreds of biases, and many of them overlap or describe the same effect under different names. That is why it makes more sense to group them by theme, such as price, social influence, memory or risk, as in the overview above.

What are some examples of cognitive biases in marketing?

Common examples include anchoring with crossed-out prices, social proof through customer reviews, scarcity through limited editions and loss aversion through free trials. The decoy effect in three-tier price lists and the default effect in pre-ticked options are also widespread.

Is using cognitive biases in marketing manipulation?

It depends on how you use them. Presenting a good offer clearly, showing genuine reviews or simplifying a choice helps customers decide. Inventing scarcity, hiding costs or pushing people into purchases they would not otherwise make crosses the line into manipulation.

Euro amounts are approximate, converted at the Czech National Bank rate of 24.34 CZK per EUR on 29 October 2026.