Experienced and Observant drivers will know the real road signs to look for. Not the posted traffic signs, but what is happening around you. Behaviours of other drivers, the area you are in, the kind of cars ahead, around, behind you. In a school neighbourhood, you will slow down and watch for small pedestrians. At a mall parking lot, you will watch for carts and distracted people. You can tell how a beginner driver turn and park, and keep extra space.
The military calls that situational awareness. That is also textbook conditional probability: You reduce number of possibilities based on information you already have. They are educated guesses, helping us make better decisions.
The human brain is lazy – it does not want to work and tries to go automatic whenever it can. The same pattern recognition that helps us when consciously applied can lead us to fast decisions that are ultimately incorrect or dangerous.
We all work with people from different countries, educational backgrounds, functions, company, or simply names. You had a good or bad experience dealing with people from company x or using their products. Does that affect your judgement on other things unrelated, but associated with that same company? From your work experience, you got burned by a dishonest person from a specific country. The next time you encounter someone from a similar background, does that make you second guess?
You face a business situation. Sales decline driven by demographic trends, consumer aging out of the category. Volume consumption drop -> sales decline -> profit gap. You have seen that trend before. Last time you worked on an inelastic category, so a price increase restored sales and profit growth. Your prior success is tempting you to apply the same “magic”.
Have you considered other factors? Are customer needs actually gone or have they just found alternatives? Is that supply or demand driven? What if – your customers (regardless of age) are increasingly priced out because they no longer value the premium the same way, or are no longer able to afford so? Then what would a price increase do?
Confirmation bias is a product of our nature. Have you checked your blind spots today?
