Have you ever made an erratic decision making that you later regretted? We’ve all been there. Sometimes, we make decisions based on our gut instinct or what feels right at the moment.

However, research has shown that our decision-making process is often biased and erratic. In this blog post, we’ll explore the illusory correlation and how it can impact our erratic decision making.

Erratic Decision Making

Erratic decision making can be defined as making decisions that are not consistent with each other or with a particular plan. This can often lead to inconsistency in results and can be confusing for others trying to understand the decision-making process.

Erratic decision making can often be the result of a lack of clear goals or objectives, and can also be the result of impulsive decision making without considering the potential consequences.

Problems in Decision-Making

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Problems in Decision-Making

1. Lack of information

2. Overconfidence

3. Emotional biases

4. Misaligned incentives

5. Groupthink

6. Confirmation bias

7. sunk cost fallacy

8. self-serving bias

One of the biggest problems people face when trying to make decisions is a lack of information.

People are often overconfident in their ability to make decisions, leading to emotional biases that can cloud their judgment. Additionally, misaligned incentives can lead to groupthink and confirmation bias, which can further distort decision-making.

Finally, the sunk cost fallacy and self-serving bias can lead people to make suboptimal decisions that they later regret.

Dr. Rachel Goldman is a clinical psychologist, licensed in the state of California, and a clinical instructor at the University of Southern California. She specializes in eating behaviors and health psychology.


Each day we are faced with a multitude of decisions. Some of these are relatively simple, such as what to wear or what to have for lunch.

Some decisions are made quickly, while others require time. Some choices, such as where to attend college, can have a big impact on your life.

There are a variety of ways we can make decisions, but we often fall victim to some common mistakes, such as falling prey to cognitive bias. By being mindful of these errors, we can make better decisions.

What mistakes or barriers do you face when making big decisions?

Heuristics and Decision-Making

These cognitive biases help us make quick, efficient, and most accurate judgments and decision, but they can also lead us astray.

Heuristics are mental shortcuts that help us make decisions quickly and efficiently. However, sometimes these shortcuts can lead to errors in judgment.

Heuristics are quick ways to reach a conclusion.

Although heuristics are a great shortcut, they can occasionally have drawbacks.

They sometimes make us make judgment errors.

Mental shortcuts can be of two kinds:

Two different types of heuristics are representativeness and availability. The representative heuristic is when we base our judgment of probability on whether or not something is similar to something else. The availability heuristic is when we base our judgments of likelihood on how easily we can recall examples.

Overconfidence in Decision-Making

Another reason why our decisions can be wrong is that we have a tendency to overrate our own abilities.

In the classic study, the researchers asked their subjects to choose an answer and then rated how sure they were of their answer.

When people were confident they were right, they were only right about 80% of the time.

Why do people tend to overestimate their abilities?

Why do people tend to overestimate their knowledge? In some cases, we might not be aware of how little we know about a certain area. In others, our information might be incorrect or from untrustworthy sources.

The overestimation of our own abilities is known as the “Dunning Kruger Effect”. This can cause us to make bad decisions, such as when we travel to Vegas with a friend who overvalues their gambling skills.

This tendency, to over-estimate our own expertise, can often lead to bad decisions. For example, imagine you are traveling in Las Vegas with your friend.

You’ve been there before, so you think you know the way. You give your friend directions that you are sure are correct.

I’m sorry, I made a mistake. The wrong route was the exit.

Your overconfidence led you to make the wrong decision, which added considerable time to your journey.

Hindsight Bias

Have you ever looked back at past situations and wished you knew what the outcome would be?

The “I knew all along” effect is a phenomenon where people believe they could’ve known the outcome of an event, even though there’s no way to have known it. This can cause someone to believe that they should’ve been able to predict the future, and can also lead them to believe that certain events were due to luck.

It’s common for gamblers to falsely believe they can predict what card will be dealt next in a game of poker. In reality, there’s no way to predict what the next card is, as it’s based on chance. This misconception is attributed to the “hindsight” or “I-knew-it-all-along” effect.

The “hindsight” effect is a cognitive error that occurs when you believe an event was foreseeable when in actuality, it wasn’t. This can affect your future decisions if you learn from your mistakes and make decisions based on those experiences.

As a result, you may decide to make decisions based on what you learned from your past.

Instead of basing your predictions on the current situation, you might base your prediction on past experiences.

Illusory Correlation

Sometimes, we see relationships between events that don’t really have any connection. For instance, we may think that two things are related just because they happened at the same time.

When we make assumptions about things based on our past experiences, we run the risk of creating false correlations. For instance, if we had a bad experience with a waiter and assume all waiters are like that, we’ve made a false assumption. This can cause us to make poor decisions.

This tendency to assume a relationship where there’s actually no relationship is known as an “illusory” or “spurious” correlation. These spurious or “false” correlations between two variables can lead to errors in decision-making.

Maybe you’re considering getting a dog or a cat, but you’re not 100% sure which type of animal is right for you.

A bad experience with a dog when you were a child may cause you to believe that all dogs are aggressive and are likely to attack.

Remember that past negative experiences can shape your decisions, even when it comes to pets. For instance, if you hated dogs as a kid, you may avoid getting a pup even though they’re a great family dog.

How Does Depression Affect Your Decision Making?

Depression is more than just feeling sad or lethargic. It can have effects on your energy levels, sleep patterns, and thoughts.

One of the effects of depression is that it can make it harder to make good decisions. Antidepressants may improve mood but they don’t seem to help with decision making.

When people are feeling down, they tend to make worse choices. These poor choices are more detrimental to their lives in the long run.

Depression can cause you to have difficulties making decisions. This could include having a difficult time choosing between options and taking longer to make a decision.

One reason people may avoid making decisions is to avoid feeling worse if the outcome is bad.

Even if she delays or refuses to make the decision, she’s still responsible. By delaying or refusing, she accepts that the decision will be made for her, so even if it turns out to be a bad decision, she won’t be blamed for it.

This is a common symptom of depression, where individuals tend to see negative outcomes in any given situation. This pessimistic thinking can often lead to inaction, as people may believe that any decision they make will result in a negative outcome.

People are more likely to avoid making a decision if they think it will have a negative consequence.

This is the result of how depression affects people’s thought processes. People who are suffering from the disorder are more likely to believe that they have fewer resources and are less likely to believe they will have more. This makes them less likely to accept promotions because they don’t think they will be able to handle them.

A person experiencing clinical or major depression may turn down promotions or job offers because they feel inadequate or pessimistic. However, this may not be the best decision, as accepting the position may lead to better long-term outcomes.

Often, “promotion” is a better option than staying put.

People who suffer from clinical depression and other types of mood disorders tend to make choices that avoid feeling anxious. This is as opposed to making choices that are in their best interest.

When people are depressed, they often feel hopeless, which can lead them not to make as many plans and to not think as carefully about their ideas.

These tasks can be mentally draining and require a lot of focus and energy – something people suffering from anxiety or stress often lack.

During periods of severe clinical depression and when patients are feeling suicidal, cognitive behavior therapies can be used to help individuals make better choices.


The illusory correlation can have a significant impact on our erratic decision making. We often think that we’re being rational when we make decisions, but the truth is that our biases can lead us astray. When faced with a decision, it’s important to take a step back and consider all of the factors at play.

Otherwise, you may find yourself regretting your choice later on down the road.

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Justin McGill
About Author: Justin McGill
This post was generated for LeadFuze and attributed to Justin McGill, the Founder of LeadFuze.