Since system 1 works on such a rapid process, it inevitably runs into problems from time to time such as the following:

• System 1 is not capable of experiencing doubt and leads to the tendency of being overly confident when we make quick decisions. However, system 2 has the capacity to experience doubt. Tip – To combat this, try to question your initial thought.

• System 1 is predisposed to jumping to conclusions with limited evidence and is likely to make predictions and assumptions about the future without assessing the evidence. Tip – Try to assess the evidence first and not jump to conclusions.

Cognitive Bias

System 1 is prone to falling for cognitive bias which makes costly decisions. Example of 3 main cognitive bias that system 1 has a habit of falling for include (FaST):



(F) Frequent Exposure Bias
People tend to develop a preference for things merely because they are familiar with them.
Tip – To combat this we must learn to pause before important decisions and ask yourself “Is this the best option or just the option I’ve been frequently exposed to?”



(S) Status Quo Bias
This is an emotional bias where we take preference for current state of affairs. We prefer to have things stay as they are or we stick with a decision because it was a decision that was previously made. This leads to 2 psychological decision theories:

• Loss Aversion – We are more likely to do anything we can to avoid risk, than we are motivated to make gains.
• Endowment Effect – We are more likely to overvalue objects that we own, invest in or are emotionally attached to regardless of its objective market value. 

We instinctively overweigh losses (loss aversion) and overvalue what we own and invest in (the endowment effect), we are trapped by the past and destined to maintain the status quo.
Tip – To counteract the status quo bias, we should ask ourselves “What opportunities do I lose by maintaining the status quo?”



(T) Tunnel Vision
We have the natural tendency to form beliefs, quick judgements based on limited information and block out conflicting information.
Tip – A way to counteract this is to ask ourselves, “Could the opposite be true?”

Past and Memories

We assume we know everything about our past and therefore can predict what the future may hold. However, we know less about the past than we think. Decisions are influenced by memories and memories can be misleading or wrong.
Tip – Make note that decisions that are based on your past and memories, these recollections could be incorrect. Our memory has evolved to represent the most intense moment of an episode of pain or pleasure (the peak) and the feelings when the episode was at its end.

Image source: Canadian Business