Cheat Sheet: 10 Easy Questions to Ask Yourself So You Don’t Fall for Cognitive Bias

Here are some common cognitive biases and a question for each that can help someone identify if they are falling into the bias:

  1. Confirmation Bias: the tendency to search for, interpret, and remember information in a way that confirms one’s preexisting beliefs.
  • “Am I only looking for information that confirms what I already believe and ignoring information that contradicts it?”
  1. Availability Heuristic: the tendency to overestimate the importance or likelihood of information that is easily available.
  • “Am I relying too much on information that is easily accessible to me, and not considering other relevant information that may be harder to find?”
  1. Anchoring Bias: the tendency to rely too heavily on the first piece of information encountered when making decisions.
  • “Am I overly influenced by the first piece of information I received, and not considering other options or perspectives?”
  1. Hindsight Bias: the tendency to believe, after an event has occurred, that one would have predicted or expected the outcome.
  • “Am I thinking that I knew all along what would happen when in reality, I only know this after the fact?”
  1. Framing Effect: the influence of wording, context, or presentation of information on decision making.
  • “Am I making a decision based on how the information is presented to me, rather than the actual information itself?”
  1. Overconfidence Bias: the tendency to overestimate one’s abilities or the accuracy of one’s beliefs.
  • “Am I overestimating my abilities or the accuracy of my beliefs without considering other possibilities?”
  1. Self-Serving Bias: the tendency to attribute successes to personal abilities and failures to external factors.
  • “Am I attributing my successes solely to my abilities and blaming external factors for my failures?”
  1. Bandwagon Effect: the tendency to do or believe something because many other people do or believe the same thing.
  • “Am I making a decision solely based on the fact that many other people are doing or believing the same thing, without considering other options?”
  1. Negativity Bias: the tendency to give more weight to negative experiences or information than positive ones.
  • “Am I focusing too much on negative experiences or information and not giving enough attention to positive ones?”
  1. Sunk Cost Fallacy: the tendency to continue investing in a decision or course of action because of past investment, even if it’s no longer rational.
  • “Am I continuing with a decision or course of action solely because I have already invested so much into it, rather than considering if it’s still rational to do so?”

Banking on Tech

Write a short article comparing the business model of a bank to the business model of a search engine framing the depositors as users and loan customers as advertisers. Make a case that it would be possible to segment bank customers into free and paid tiers based on their profitability.

The business models of a bank and a search engine may seem unrelated at first glance, but there are similarities that can be drawn between them. In this article, we will explore how the depositors of a bank can be compared to the users of a search engine, while the loan customers can be likened to advertisers.

Both banks and search engines rely heavily on the trust and loyalty of their users. Banks attract depositors by offering a range of services, such as savings accounts, checking accounts, and loans. Search engines attract users by offering relevant search results and a personalized experience. In both cases, these businesses make money by leveraging the data and preferences of their users.

In the case of banks, loan customers can be compared to advertisers. Just as advertisers pay search engines for targeted ads, loan customers pay banks interest on their loans. Banks use the funds from these loans to pay interest on deposits and to fund their operations. This creates a symbiotic relationship between depositors and loan customers, where both parties benefit from each other’s participation in the system.

It’s possible to segment bank customers into free and paid tiers based on their profitability. Free users are depositors who don’t take out loans or use other fee-based services, such as overdraft protection or wire transfers. These users generate revenue for the bank by allowing the bank to lend their funds to other customers. In contrast, paid users are those who use fee-based services, such as loans, credit cards, and other lending products. These users generate more revenue for the bank because they pay interest on their loans and may also incur fees for certain services.

In conclusion, while banks and search engines may seem like vastly different businesses, they share many similarities. Both rely heavily on the trust and loyalty of their users, and both generate revenue by leveraging the data and preferences of those users. By segmenting bank customers into free and paid tiers based on their profitability, banks can ensure that they are maximizing their revenue while still providing value to their customers.

Bitcoins, Bancors, Battlestar Galactica

This post is a bunch of generalizations wrapped up in a clouded, fragile opinion which has a high propensity to be proved wrong. In the time since I began writing this to the time I published it there have been many more public disputes over the issue of Bitcoin and whether it is a bubble, the future of currency, both, or neither. In addition, the price of one Bitcoin increased from the equivalent price of about two ounces of gold to three ounces and back down again. In my opinion, Bitcoin isn’t worth one dollar, definitely not worth multiple ounces of gold, but it could, hypothetically, be worth an undetermined number of Bancors.



Bitcoin is a digital currency which was created in 2009. The creator of Bitcoin is still officially unknown although it is attributed to an individual named Satoshi Nakamoto. Bitcoin is a type of cryptocurrency where balances are kept using public and private “keys,” which are long strings of numbers and letters linked through a mathematical encryption algorithm. The public key serves as the address which is published to the world and to which others may send bitcoins. The private key is intended to be a secret which is used to authorize Bitcoin transmissions. In this way there are no physical bitcoins, only balances kept on a public ledger where all Bitcoin transactions are verified by computers.

The computing power required to broadcast and verify Bitcoin transactions is given by “miners” are motivated by the release of new bitcoin and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the ongoing stability of the Bitcoin network. Bitcoin mining is the process through which bitcoins are released to come into circulation. Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain, and receiving a reward in the form of few bitcoins. As more and more bitcoins are created, the difficulty or the amount of computing power involved increases. The mining difficulty began at 1.0 with Bitcoin’s debut back in 2009 and as of November 2017, the mining difficulty is over one trillion. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million, which creates a finite bound on the monetary supply.

To transact in Bitcoin, a transaction needs to be digitally signed using a the private key. While there are preventative measures one can take to protect their Bitcoins, if the private key is lost, there is no backup and the coins are essentially lost. Although the private key is digital it is susceptible to loss in a physical sense since it is private and maintained on a physical computer.

Bretton Woods and Bancor

In July of 1944, although things are winding down, the world is still at war. A conference was held at the Mount Washington Hotel in Bretton Woods, New Hampshire. Representatives from forty-four Allied countries met to plan how the worlds financial system would function after the war. It was at this conference that organizations like the International Monetary Fund were created. There is a well publicized dispute between the representative from the United States, Harry Dexter White, and the representative from the United Kingdom, the ubiquitous John Maynard Keynes, over specifically what currency should be used for international exchange. 

Keynes proposed the world adopt a new currency called Bancor which could only be exchanged through the International Clearing Union. When a country exported goods Bancor would be added to its ICB account, and when a country imported goods Bancor would be subtracted. The goal was to prevent countries from racking up too large of a trade surplus or deficit. If these grew too large the countries currency would be appreciated or depreciated as needed to rebalance trade. In other words, countries could exchange gold for Bancor, but not Bancor for gold.  

In this way Bancor was a precursor to Bitcoin in revolutionizing the accountancy for currency. It essentially was a centralized ledger for managing a statement of accounts, and while not backed by any underlying asset, would have an agreed value by all market participants. Long story short, White won the argument and the US Dollar is the reserve currency of the world.

Dollars Make Sense

Ever since the United States dropped the gold standard beginning with FDR and culminating with Nixon, the U.S. Dollar has been a fiat currency, or currency not represented by an underlying commodity. Although these fiat currencies have no intrinsic value, they are backed by the full faith and credit of their issuing government. In most financial theories there is a concept called the risk free rate which is the theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. In most cases the three-month U.S. Treasury bill is a useful proxy because the market considers there to be virtually no chance of the government defaulting on its obligations. While this is not really risk-free, U.S. debt is the commonly accepted vehicle of the least risky asset you can own, which means that a currency backed by the full faith and credit of the U.S. government is a relatively safe asset.

Another simple example of the benefits of fiat currency is damage. In the case of U.S. currency damaged bills can be easily replaced at a financial institution if they clearly represent more than half of the bill. Even if the bills are further damaged or mutilated, such as in a fire or flood, there is a process to replace them at the Treasury’s Bureau of Engraving and Printing.

Unlike fiat currencies and commodity currencies, digital currencies are backed by nothing but belief. Commodity currencies have a value which is determined by a belief in the value of a scarce resource. This same scarcity is created with digital currencies, but there is no underlying tangible asset. Gold can make overpriced Monster cables sound better since it has superior conductive properties. Bitcoin cannot be built or manufactured into anything.

Many feel that fiat currencies are only backed by belief, but the distinction comes in what the belief is in. Fiat currencies are backed by belief in law and government, and are a universally accepted means of exchange. Yes, it is possible that the fall of a country’s currency can occur with hyperinflation, which was witnessed in Zimbabwe, but these occurrences are rare and typically surrounded by a larger turmoil in which case access to electricity or the internet which are required for Bitcoin to function would also most likely be scarce to acquire.  

iOS 12, Now With Asbestos in the Filter

Phone Warning

Earlier this week Apple announced iOS 12 with a new feature called Screen Time which tracks how much you use your phone and apps. This follows in the steps of Google whose Android P contains a similar set of tools to help users track and limit the time spent with their apps and devices.  Both have been promoted as features meant to benefit their users in the wake of the discovery of the negative mental health effects of the notifications and constant connection to social media that our phones provide.  There has been much coverage in the media recently about children being addicted to their phones and the negative effects of social media consumption.  A 21st century problem with a 21st century solution.  Now is where I start the history lesson.  

In 1952 the Lorillard Tobacco Company released Kent Cigarettes which were the first popular cigarette to feature a filter.  This was around the same time that the popular series of articles were featured in Reader’s Digest titled “Cancer by the Carton”.  Kent cigarette sales skyrocketed, and they touted the health benefits of their filtered cigarettes as “the greatest health protection in history”. The sad backlash of the story is that the Kent Micronite filter contained asbestos, which is now known to be one of the leading causes of mesothelioma, a type of cancer. 

Even without placing additional carcinogens directly between your lips, cigarette filters are not exactly what they have been purported to be.  In some ways, they work. Filters do reduce both the amount of tar and nicotine in the smoke of the cigarette. Less tar was originally thought to be beneficial to the health of the smoker.  A healthy smoker is a long-term smoker. Take it one step further and ask your drunk uncle if switching to the lower ABV of beer will stop him from getting as drunk as liquor. Coincidentally it appears that both benefits of the cigarette filter have a strong correlation to increased cigarette sales. 

I’m not expressing this to be a conspiracy theory.  More than likely, you discovered this post though Facebook or Google. I would correlate the new iOS and Android features to be in line with the broader trend of corporate social responsibility. These features are being rolled out to correct a previously unknown health risk of our phones. It was just an oversight in thinking by corporate officials.  It certainly is not related to Google’s burying of the phrase “Don’t be Evil” deep into its code of conduct. It’s not.  

Did the McCain Dissenting Vote Save the GOP?

While his no vote on the senate healthcare bill ruined the Republican attempts to repeal the Affordable Care Act, it may have saved their chances of maintaining congressional majorities in the mid-term elections.

Obamacare protesters in 2009. (Source:
Obamacare protesters in 2009. (Source:

In a highly dramatized moment, on July 28, 2017, John McCain gave a deliberate thumbs down and ended the nearly eight year quest for Congressional Republicans to repeal Obamacare. It was a wincing blow to the GOP who has made Obamacare one of their rallying cries for the better part of a decade. On that note, it is also worth noting that McCain was not alone, with Senators Susan Collins of Maine and Lisa Murkowski of Alaska expectedly voting against the bill.

In my opinion, this was a good move for the American healthcare system. The so-called “skinny” repeal bill would have still left sixteen million less people with insurance in ten years. The Obamacare debates and town halls which took place throughout 2009 were some of the most divisive moments in recent American history. Turnout at these events was unbelievable for a largely uninvolved public.

These events led to a “shellacking” in the 2010 midterm elections as then-President Obama described it. A common joke among liberals is the protester holding a sign stating, “Keep Government out of my Medicare”. To be honest it still makes me laugh a bit, but I feel it serves as a sign of the broader misunderstanding of the American healthcare system.

This broad misunderstanding of healthcare creates and inherent resistance to change. It is scary, the possibility that you may need to change doctors, or will somehow receive less adequate care. In an already extraordinarily polarized moment, had one of the GOP healthcare bills passed, they could have been in for a shellacking come 2018. With his thumbs down John McCain may have saved the GOP hold on congress in 2018.