Bias Can Be Good

I recently found <a href="https://en.wikipedia.org/wiki/List_of_cognitive_biases">this neat Wikipedia entry, "List of cognitive biases." The listing is thorough and should interest any behavioral economist as well as sociologists, psychologists, and others.

One thing I would like to point out is that some of these biases are good. That is to say that some of these biases actually encourage rapid discovery of true information. In particular I would point to the Bandwagon Effect. This effect is the tendency of an individual to believe some statement when they know that many other people believe that statement.

Consider some claim that a large majority of people agree to. It is by no means certain. This would be the fallacy called argument ad populem. It seems plausible, however, that the claim is more likely to be true than some claim which everyone says is false. In other words the argument ad populem seems to succeed as evidence but not proof of some claim.

The reason that argument ad populem succeeds as evidence is straightforward from market economic thinking. As I mention in <a href="https://www.youtube.com/watch?v=14ZqFmUNrY8">this old video and elsewhere, when a free market is exposed to information the market tends to identify and adopt as true that information which is most true. The so-called argument ad populem is actually very much an appeal to the information processing power of the market.