The Data is Clear – But Humans are not Munich Data Geeks July 2023

Agenda Cognitive Biases Examples of Biases in Data Analytics Tactics to avoid Biases Digression – How the right look at data can make you happier

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What are Cognitive Biases? Mental shortcuts that our brains use to process information and make decisions quickly. Help reducing complexity and protect from cognitive overload. Automatic Subconscious

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Selected Examples AVAILABILITY BIAS CONFIRMATION BIAS

Availability Bias “The tendency to rely on information that comes readily to mind when evaluating situations or making decisions.”

Technical Availability Bias – Website Tracking • Low cookie consent doesn’t allow valid hypothesis on whole population of users. • Patterns in cookie consent further skews data. • Opt-in users not representative group.

Cognitive Availability Bias – TV Campaign for VPN

Cognitive Availability Bias – TV Campaign 0 0.005 0.01 0.015 0.02 0.025 0.03 0.035 0.04 0.045 0.05 Pro 7 N24 DMAX Comedy Central Pro 7 MAXX VIVA Sky Response Rate

How to Avoid Availability Bias • Be aware of the effect. • Avoid quick decisions. Awareness. • Promote in group brainstormings. • Seek input from others. Diversity.

Confirmation Bias “The tendency to interpret new evidence as confirmation of one's existing beliefs or theories.”

Confirmation Bias

One of the most holistic Biases in Data Analytics. Can influence all parts of research. Research question. “Do we have more sales on weekends?” vs. “Are there certain dates with increased sales?” Interpreting the data. Subconsciously looking out for data that supports sales on weekends are stronger. Creating follow up hypothesis. Which business decisions should be taken to leverage the (false) conclusion?

Confirmation Bias - Example

How to Avoid Confirmation Bias • Awareness • Proactively seek out for evidence disprooving your hypothesis. • Engage a “Devil’s Advocate”. • Promote open discussions about findings.

Summary - How to Avoid Bias in Data Analytics Structural • Constant reminders • Open company culture that encourages discussion. • Regular training Awareness • Acknowledge existence of bias. • Raise awareness in peers. Diversity • View data from diverse viewpoints. • Engage with people from different backgrounds.

Digression – How excel sheets can make you happy

Negativity Bias “Tendency to pay more attention to negative information than to positive information. Here, more weight is given to negative experiences over neutral or positive experiences.”

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Avoid Negativity Bias • Change the filter and review the data. • Proactively focusing on positive events. ➢ Gratitude Journal • Improves wellbeing and optimism significantly. • Other findings: • Test groups exercised more. • Improved sleep. • Less visits to physicians. • Lower blood pressure. • Less inflammation biomarkers.