This is the tendency for people to value more immediate payoffs higher than remote payoffs.

Sort of makes sense, right?  I’d prefer to get $5 today than $5 tomorrow.  But would I rather get $10 today or $11 next week?  Or would I rather get $500 today or $1,000 a year from now?  In all three cases I’d probably take what I could get now rather than wait for the bigger payoff in the future.
However, the other twist is that this bias diminishes if both payoffs aren’t that close to the present.  For example, I’d rather take $1,000 5 years from now than $500 4 years from now.  As long as I’m waiting 4 years, might as well wait the 5th for twice as much.  But if you compare it to the example in the paragraph above, you’ll see how this logic seems to flip flop a bit.  In both cases waiting a year could gain me $500, but waiting a year right now seems harder than waiting a year 4 years from now.  Hence the hyperbolic nature of this bias… it slowly twists over time.  It’s irrational because you treat the same problem differenly depending on an arbitrary variable (its nearness in time to you).
Marketers can take advantage of this bias by offering you something small now in exchange for something bigger later.  Credit cards, banks, and loan companies seem to thrive on this bias alone.

This is the enhancement or diminishment of a weight or other measurement when compared with recently observed contrasting object. [Wikipedia]
I think this is one of the more powerful and disturbing cognitive biases that we have to deal with.  Our brains are designed to notice change in value rather than value itself, and there are endless ways to trick us into thinking something is a good simply because it is not as bad as it used to be, and something is bad simply because it is not as good as it used to be

Another more dramatic name for this bias could be Value Blindness. We simply can't judge a things value in itself without having a context in which the value is determined.  Context serves as a bag of comparison possibilities.  Think about it for a second.  Do you realize that people purposefully limit their scope of understanding about the size and magnificence of the universe in order to keep their own significance in the universe in check?  We purposefully underestimate the amount of happiness and intelligence in the world in order to support our own sense of happiness and intelligence.  This isn't done with malicious intent, we simply have trouble believing in our own significance while also understanding our literal insignificance relative to the entire country, world, solar system, galaxy, and universe.  In some cases, feeling insignificant, feeling like a tiny speck in a grand universe, feeling like the tiniest almost invisible speck in all of space time, can lead to depression and maybe even suicide.  Words like insignificant, hopeless, impossible, and futile are a result of contrast effect with too large of a perspective of the world or too small of a perspective of yourself.

The reason that this is dangerous is because we know about it and people who have motivation to make things appear better or worse than they really are have a very simple tool to do so.  People can make money off of you with this bias. The most obvious examples are in marketing, with sales and aspirational items, and determining your status and wealth by comparing yourself to your neighbors, but like I mentioned already it can go very deeply into our own understanding of self and meaning.
What tools are there to help correct for the contrast effect? There is the brute force willpower way of correcting for it by making note of what you're comparing everything with.  But is it possible to stop noticing contrast in value?  I don't think it is.  We're doomed!  Haha.

One other stopgap duct tape option is to make sure you regularly calibrate your comparison systems.  Experience a wide range of lifestyles, philosophies, and attitudes towards your world.  Travel frequently and meet new people and try new things and keep as much variety in your life as possible.  This way, you can be sure to have a broad palette of comparisons available, and you can influence your comparisons to go in a direction of your choice.

A great excerpt from a commencement address by Stephen Colbert which nicely articulates one of my favorite personal mottos: Accept All Offers.  In improve comedy, you build a story by saying "yes, and…", basically accepting what is there, and building on it.  It's a great philosophy for life, I think.

You seem nice enough, so I’ll try to give you some advice. First of all, when you go to apply for your first job, don’t wear these robes. Medieval garb does not instill confidence in your employers—unless you’re applying to be a scrivener. And if someone does offer you a job, take it. You can always quit later. Then at least you’ll be one of the unemployed as opposed to one of the never-employed. Nothing looks worse on a resume than nothing.

So, say “yes.” In fact, say “yes” as often as you can. When I was starting out in Chicago, doing improvisational theatre with Second City and other places, there was really only one rule I was taught about improv. That was, “yes-and.” In this case, “yes-and” is a verb. To “yes-and.” I yes-and, you yes-and, he, she or it yes-ands. And yes-anding means that when you go onstage, they provide a theme, no script. You have no idea what’s going to happen, maybe with someone you’ve never met before. To build a scene, you have to accept. To build anything onstage, you have to accept what the other has provided or initiated on stage. They say you’re doctors—you’re doctors. And then, you add to that: We’re doctors and we’re trapped in a cave. That’s the “-and”. And hopefully they “yes-and” you back. You have to keep your eyes open when you do this. You have to be aware of what the other performer is offering you, so that you can agree and add to it. And through this agreement, you can improvise a scene or a one-act play. And because, by following each other’s lead, neither of you are really in control. It’s more of a mutual discovery than a solo adventure. What happens in a scene is often as much a surprise to you as it is to the audience.

Well, you are about to start the greatest improvisation of all. No script. No idea what’s going to happen, often with people and places you have never seen before. And you are not in control. So say “yes.” And if you’re lucky, you’ll find people who will say “yes” back.

Now will saying yes get you in trouble at times? Will saying yes lead you to doing some foolish things? Yes it will. But don’t be afraid to be a fool. Remember, you cannot be both young and wise. Young people who pretend to be wise to the ways of the world are mostly cynics. Cynicism masquerades as wisdom, but it is the farthest thing from it. Because cynics don’t learn anything. Because cynicism is a self-imposed blinder, a rejection of the world because we are afraid it will hurt us or disappoint us. Cynics always say no. But saying yes begins things. Saying yes is how things grow. Saying yes leads to knowledge. Yes is for young people. So for as long as you have the strength to, say yes.

The full commencement address is definitely worth reading: 2006 Commencement Address to Knox College 

This is the tendency to not see your own cognitive biases.  A bit of a cheat, I think this one is, since a bias that you saw would probably not really be a bias anymore.  So we'll pass over this one lightly, and move on.

Since thinking about Daniel Gilbert’s talk about how we tend to make errors of odds and errors of future value about things, I thought it would be sort of fun to walk through many of the known cognitive biases and logical fallacies that our brains are susceptible to. Why not? Here we go.

We all know the bandwagon of popular opinion and its magical allure. Literally, bandwagons are wagons that carry the band in a parade. Being on the bandwagon was a very convenient way to experience the parade since you got to listen to the music and didn’t have to walk. Since William Jennings Bryan used the phrase “hop on the bandwagon” during his 1900 presidential campaign, it has itself become a trendy term to express the naive adoption of popular trends simply because they are popular.

Why is the bandwagon so alluring?

It has to do with certainty, and the odds of your own judgment being challenged. If you don't have a strong preference for a particular thing, it is easier to agree with the majority than it is to disagree. Disagreement usually requires a solid stance to support your side. The more people on the bandwagon, the more solid your argument about why you're not on it has to be. Try arguing for the war in a liberal city and you will need to have much more information to back up your opinion than you would if you were against the war. And vice versa, if you try arguing against the war in a conservative city the same burden of proof will lie on you.

The bandwagon, literally and figuratively, is for resting your feet. Letting the trend carry you forward, while being able to listen to the music and enjoy the company of friends at the same time.  It's not a bad thing, but the feet and preferences do need to be stretched once in a while.

The opposite of the bandwagon effect

The opposite of the bandwagon effect is just as silly as the bandwagon effect itself.  While some of us pride ourselves on avoiding bandwagons, it's as much folly to avoid bandwagons simply because they are popular.  

Try catching yourself falling hopping on and avoiding bandwagons.  Try to stop seeing them altogether, and judging the band and parade on their own merit rather than on their popularity or unpopularity.  It's really difficult! 

Eustress is what they call good stress. The kind you feel when you get a raise, or buy a new house, or go on a great first date. Good in the sense that it makes you feel good, that the stress is enjoyable. Challenges and projects create eustress, overload and problems create distress (bad stress).

However, eustress is not the same as serenity and blissfulness. Eustress is still stress. It still has many of the same symptoms of distress, including:

  • Raised adrenaline levels
  • Raise corticosterone levels (a steroid hormone)
  • Increased heart-rate
  • Increased respiration
  • Higher blood pressure

Good stress will also just as easily lead to physical problems such as heart disease, high blood pressure, stroke, enlargement of the adrenal glands, and other illnesses (according to Wikipedia, and when are they wrong).

Stress is a big deal. If you look at the list of 15 ways to live longer, you’ll quickly notice that almost all of them are related to mental or physical stress. Be optimistic, have a pet, be rich, chill out, laugh a little, manage stress, and meditate are all about managing mental stress. Don’t oversleep, have more sex, get a VAP (cholesterol test), stop smoking, eat your antioxidants, and exercise are all about managing your physical stress. What I’m saying, I guess, is be stressed about stress!

What is the purpose of eustress?

I used to believe that my purpose in life was to find reasons to celebrate. It was a general theory I had that by seeking reasons to celebrate that I would seek worthwhile things. Everyone likes to celebrate… our society is pretty much built on this premise: happy hours, Fridays, dessert, holidays that we don’t even know much about other than that we get the day off or get presents, New Years, etc. In a society where we say anything is possible if you work for it, celebration is the carrot of success.

Celebration involves a shift in priorities… up until now you have been focused on working, saving, building, designing, and planning… celebration involves the opposite: playing, spending, taking down, relaxing, enjoying. It involves partying and drinking and perhaps being a little crazy.

If you think about it, celebration and eustress work to bring you back to normal levels. Eustress is a form of negative feedback designed to spend excess energy, success, money, happiness, and alcoholic tolerance and bring you back to a level that you’re more comfortable with. This is not necessarily a bad thing… saving money your entire life without ever enjoying the benefits of spending it sounds like a life wasted. On the other hand, you can see the symptoms of this with people who rise quickly in fame or wealth… many times they will end up spending it all wildly and quickly end up right where they started.

What is the alternative to eustress?

It makes sense for some systems to maintain homeostasis. For example, our bodies need to regulate on the principles of homeostasis for a number of things such as body temperature, oxygen levels, hydration, etc. When we’re hungry, we should be distressed and seek food. When we’re full, we should feel satiated and energized and expend energy. When we’re cold, we should shiver and when we’re hot we should sweat.

However, there are other systems that may seem to be homeostatic but which sometimes are not. The money in our bank for example. Oftentimes our incomes will remain fairly fixed, and so we know when we’re spending too much and when we have some money that we can safely spend. This triggers the eustress/distress principles of spending… who doesn’t sometimes feel the pinch right before payday and decline on the spontaneous trip to Vegas, and who hasn’t celebrated on a payday with a few extra drinks or a nicer meal? But, if you think about it, there’s no reason why a bank account has to have a particular dollar amount comfort zone. Some people maintain their balance near zero, and others maintain their balance near $100,000… and it makes no qualitative difference if you still feel as distressed at $99,990 as you do at -$10. I’ll give you two choices. Who would you rather be:

  • Someone who spends money whenever they get it, but never has savings.
  • Someone who saves all their money and never enjoys it.

Celebrator or scrooge… those are your two options. Well, of course, everyone wants to be somewhere in between. How does “in between” avoid the problem though? How much should you save? How often should you celebrate? The scroogier you are, the more quickly you’ll amass riches! But what use is amassing riches if you never have fun? The dilemma continues.The answer is simple. Know what you’re working towards. If you know what your ideal scene is, you’ll know why you’re saving, and you’ll also preserve the spirit of the scene that you’re working towards. Use distress and eustress to your advantage… they are tools for promoting change and all you need is a direction to point it.

More about stress:

Your working memory (some people call it their short-term memory) is one of the weirdest tools of the mind. It is that mental space at the forefront of our minds where we put everything that we want to have available to us but don't yet know if it's important enough to keep in longer term memory. A few characteristics of this mental fanny pack (David Allen calls "psychic RAM") include:

  • Urgent, unfinished: The information is usually attached to some urgent, unfinished, task. Your brain assumes that it will get done soon, so doesn't bother trying to find any more permanent storage for the information.
  • Constantly recalled: This information acts like a rotating merry-go-round of information constantly circling back around to consciousness. This needs to happen or else it will fall out of memory and be lost. As a result, information in your working memory is constantly distracting you.
  • Stressful: Each piece of information carries with it a teaspoon of stress… this stress is the energy that it sends to you in order to give in another ride on the merry-go-round. Without the stress, you would stop caring about the information and it would fall out of memory. With the stress, you give the information a ticket to ride the merry-go-round one more time and hope that next time it comes around you might be more inclined or able to resolve the issue that the information is being saved for.

Realizing the characteristics, limitations, and strengths of your working memory is essential to making sure you use it correctly. For example, because this information literally uses distraction and stress as the mechanism for keeping itself in memory, you should make sure that the information you keep there is not only urgent but also important. Or, if you subscribe to the Getting Things Done model, you should attempt to remove almost all information from your working memory and capture it in ways that do not rely on stress and distraction for their survival. The desire to call your mom for Mother's Day need not make 100 cycles through your mind before you actually do it… just capture that information on a calendar once, make sure that you regularly check this calendar, and make it through the next three days with that much less stress and that much less distraction.

Link: Working Memory [Wikipedia]

Confabulation is what happens when your imagination works with your memory to generate a story, in particular it is the confusion of imagined details with true events. The interesting thing about confabulation is that you cannot avoid it. Imagination and memory are two heads of the same coin. Every time you access a memory, your brain will load it up into the imagination, fill in any missing details, and re-write it back into memory. As a result, stories will change and crystalize over time. In addition to this imagination/memory link, there are a couple other interesting processes at work here:

Mirror neurons. Mirror neurons our one of our brain's greatest inventions. They allow us to learn from other people's successes and failures without having to experience them directly. Your brain stores details about stories heard from others (depending on your level of empathy) in the same way that it stores facts about things you saw and experienced personally. Have you ever told a story that you thought happened to you only to realize later that it had actually happened to someone else and you had in fact related to it to the extent of adopting it as your own, unintentionally?

Choice blindness. We are often not given direct access to the reasons we act the way we do. We will sometimes say something we do not want to say, or choose something based on a "gut feeling" or and impulse. One of the most active portions of our conscious mind is its ability to attach stories to our behavior… to explain it both to ourselves and to others. Choice blindess is a psychology term coined by Petter Johansson to explain the slight confabulation that must occur whenever we attempt to explain why we chose something that we do not know exactly why we chose.

Confabulation is a wonderful thing. Confabulation is nothing to feel guilty about… it's more of a revelation than a confession to realize just how integral our imaginations are in processing and relating stories and experiences in our daily life. Enjoy your own confabulation, and the confabulation of others… it makes life feel a little more playful.

If you're interested in reading more about confabulation:

I've borrowed the term "mutual-improvement" as a twist on the traditional field of self-improvement, and originally inspired by Benjamin Franklin's description of his amazingly productive Junto:

I should have mentioned before, that, in the autumn of the preceding year, [1727] I had form'd most of my ingenious acquaintance into a club of mutual-improvement, which we called the Junto; we met on Friday evenings. The rules that I drew up required that every member, in his turn, should produce one or more queries on any point of Morals, Politics, or Natural Philosophy, to be discuss'd by the company; and once in three months produce and read an essay of his own writing, on any subject he pleased. Our debates were to be under the direction of a president, and to be conducted in the sincere spirit of inquiry after truth, without fondness for dispute or desire of victory; and to prevent warmth, all expressions of positiveness in opinions, or direct contradiction, were after some time made contraband, and prohibited under small pecuniary penalties.

If you can get past the stiff puritanical tone of this passage, it talks about something pretty radical.  Where in our society today do we have an opportunity to meet regularly with our peers to work on the mutual-improvement of all members?  From this Junto that Benjamin Franklin put together (and which continues to this day in the form of the American Philosophical Society) sprouted the volunteer fire department, lending libraries, improved security (night watchmen), and a public hospital.

A similar, but slightly more corporate-sounding and slick, term that is familiar to most people is the "win-win" situation where all participating members benefit from a given situation.

The power of mutual-improvement and win-win situations is that all members of a group can act selfishly and selflessly at the same time.  There's no need to implement a complicated set of forced rules or ethics that keep people in line, as the situation itself allows everyone to come out ahead merely by acting out of their own self-interest. 

“The sneaking feeling one has that others are conspiring behind your back to help you.”

At first, this sounds a bit like a definition in a Hallmark card, and in fact the term was popularized by a wacky group of new age “Zippies” (which stands for zen-inspired professional pagans!) who, in the early 1990s, believed that they had a new generation of hippies plus technology with which to battle the growing forces of yuppies. Who knows where these “hippies with zip” are now? I’d actually like to know.

There’s actually some game theory behind pronoia too. An atmosphere of pronoia is self-sustaining. Another way to think about this in game theory jargon is that life is a non-zero-sum game: if you took all the winnings in Vegas, then subtracted all the losses, you’d end up with zero… on the other hand, if you took all of the benefits gained from a healthy community and subtracted all of the losses, one would come up with a sum greater than zero. A zero sum game is like chess… it is impossible for both people to win. In a city, family, company, or friend group, on the other hand, it is possible for every member of the system to benefit… cooperation in a complex environment will lead a gestalt to form where the whole is greater than the sum of its parts. When a community works together to mutually benefit all of its members, a philosophy of pronoia is healthy and accurate and will contribute to the continued amplification of benefit.

One of the goals of focusing on pronoia is to gradually broaden the set of people that you believe are conspiring behind your back to help you. Mutual-improvement can happen in any sized group, from a relationship, to a family, to a neighborhood, to a company, to a city, to a country, and eventually to the world. Maybe I am a Zippy after all.