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18 Cognitive Bias Examples Show Why Mental Mistakes Get Made

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18 Cognitive Bias Examples Show Why Mental Mistakes Get Made

18 Cognitive Bias Examples

View the high resolution version of today’s graphic by clicking here.

Out of the 188 cognitive biases that exist, there is a much narrower group of biases that has a disproportionately large effect on the ways we do business.

These are things that affect workplace culture, budget estimates, deal outcomes, and our perceived return on investments within the company.

Mental mistakes such as these can add up quickly, and can hamper any organization in reaching its full bottom line potential.

Cognitive Bias Examples

Today’s infographic from Raconteur aptly highlights 18 different cognitive bias examples that can create particularly difficult challenges for company decision-making.

The list includes biases that fall into categories such as financial, social, short term-ism, and failure to estimate:

Financial biases
These are imprecise mental shortcuts we make with numbers, such as hyperbolic discounting – the mistake of preferring a smaller, sooner payoff instead of a larger, later reward. Another classic financial cognitive bias example is the “Ostrich effect”, which is where one sticks their head in the sand, pretending that negative financial information simply doesn’t exist.

Social biases
Social biases can have a big impact on teams and company culture. For example, teams can bandwagon (when people do something because other people are doing it), and individual team members can engage in blind spot bias (viewing oneself as less biased than others). These both can lead to worse decision-making.

Short Term-isms
One way to ensure a business that doesn’t last? Engage in short term-isms – fallacies that gear your business towards decisions that can be rationalized now, but that don’t add any long-term value. Status quo bias and anchoring are two ways this can happen.

Failure to Estimate
So much about business relies on making projections about the future, and the biases in this category make it difficult to make accurate estimates. Cognitive bias examples here include the availability heuristic (just because information is available, means it must be true), and the gambler’s fallacy (future probabilities are altered by past events).

Want more on cognitive biases? Here are five main biases that impact investors, specifically.

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Ranked: Biggest Fast Food Chains in America

Every year, fast food chains rake in north of $200 billion in revenue per year. Here are the biggest chains, ranked by revenue and number of locations.

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revenue fast food chains

Ranked: The Biggest Fast Food Chains in America

Fast food is a supersized business in America.

The average American spends as much as $1,200 every year on fast food — and roughly a quarter of the U.S. population eats three or more fast food meals per week.

Today’s unique infographic, via TitleMax, shows just how dominant the quick serve food industry is, and which brands are leading the pack in terms of revenue and store locations.

Billions Served

All of the biggest fast food chains now top $1 billion in sales annually. McDonald’s leads the pack with almost triple the sales of the number two chain, Starbucks.

Below are the top 30 fast food chains in the United States by revenue:

RankChainSales (U.S., 2017)# of Locations (U.S.)
1McDonald's$37.5B14,036
2Starbucks$13.2B13,930
3Subway$10.8B25,908
4Burger King$9.8B7,226
5Taco Bell$9.3B6,446
6Wendy's$9.3B5,769
7Dunkin' Donuts$5.9B12,538
8Chick-fil-A$9.0B2,225
9Domino's$5.9B5,587
10Pizza Hut$5.5B7,522
11Panera Bread$4.5B2,043
12Chipotle$4.5B2,371
13KFC$4.4B4,019
14Sonic Drive-In$4.4B3,593
15Dairy Queen$3.6B4,455
16Arby's$3.6B3,415
17Little Caesars$3.5B4,332
18Jack in the Box$3.5B2,251
19Popeye's$3.2B2,231
20Papa John's$3.1B3,314
21Panda Express$2.3B2,011
22Whataburger$2.3B821
23Hardee's$2.2B1,864
24Jimmy John's$2.1B2,755
25Zaxby's$2.1B890
26Carl's Jr.$1.5B1,156
27Five Guys$1.4B1,321
28Culver's$1.4B643
29Bojangles'$1.3B764
30Wingstop$1.1B1,027

In 2017, the top 30 fast food chains rang up $172 billion in sales at over 140,000 locations across the United States. When smaller chains are also included, annual industry revenue tops a whopping $200 billion.

Location, Location

Fast food can be a profitable business, but certain chains are runaway successes when sales-per-unit are considered. Chick-fil-A’s sales average out to $4.3 million per location — 53% higher than McDonald’s, which brings in $2.8 million of sales per location.

Subway, which is known for having a low franchise fee and no exclusive territory rights, has the lowest sales-per-unit in the top 30 ($419,792).

That said, no one can compare to Subway in terms of sheer volume. The chain has over 25,000 locations, making it not only the biggest fast food chain in the country, but the most common retailer overall (even beating out dollar stores). It’s possible that America has seen peak Subway though — the number of locations has been steadily dropping since 2011.

On the opposite end of the spectrum is Starbucks. The Seattle-based coffee chain has been relentlessly expanding over the past decade.

Regional Preferences

Of course, not all fast food chains have the ubiquity of Subway and McDonald’s. Many of these brands have achieved impressive sales numbers in specific regions. Whether you’re loyal to Dunkin’ Donuts, Chick-fil-A, or In-N-Out may depend heavily on where you live.

dunkin donuts vs starbucks

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Will America’s next big fast food powerhouse come from an already-strong regional chain, or will it be the result of a new phenomenon, completely?

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Maps

Wired World: 35 Years of Submarine Cables in One Map

Watch the explosive growth of the global submarine cable network, and learn who’s funding the next generation of cables.

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submarine cable network

You could be reading this article from nearly anywhere in the world and there’s a good chance it loaded in mere seconds.

Long gone are the days when images would load pixel row by pixel row. Now, even high-quality video is instantly accessible from almost everywhere. How did the internet get so fast? Because it’s moving at the speed of light.

The Information Superhighway

The miracle of modern fiber optics can be traced to a single man, Narinder Singh Kapany. The young physicist was skeptical when his professors asserted that light ‘always travels in a straight line’. His explorations into the behavior of light eventually led to the creation of fiber optics—essentially, beaming light through a thin glass tube.

The next step to using fiber optics as a means of communication was lowering the cable’s attenuation rate. Throughout the 1960-70s, companies made gains in manufacturing, reducing the number of impurities and allowing light to cross great distances without a dramatic decrease in signal intensity.

By the mid-1980s, long distance fiber optic cables had finally reached the feasibility stage.

Crossing the Pond

The first intercontinental fiber optic cable was strung across the floor of the Atlantic Ocean in 1988. The cable—known as TAT-8*—was spearheaded by three companies; AT&T, France Télécom, and British Telecom. The cable was able to carry the equivalent of 40,000 telephone channels, a ten-fold increase over its galvanic predecessor, TAT-7.

Once the kinks of the new cable were worked out, the floodgates were open. During the course of the 1990s, many more cables hit the ocean floor. By the dawn of the new millennium, every populated continent on Earth was connected by fiber optic cables. The physical network of the internet was beginning to take shape.

As today’s video from ESRI shows, the early 2000s saw a boom in undersea cable development, reflecting the uptick in internet usage around globe. In 2001 alone, eight new cables connected North America and Europe.

From 2016-2020, over 100 new cables were laid with an estimated value of $14 billion. Now, even the most remote Polynesian islands have access to high-speed internet thanks to undersea cables.

*TAT-8 does not appear in the video above as it was retired in 2002.

The Shifting Nature of Cable Construction

Even though nearly every corner of the globe is now physically connected, the rate of cable construction is not slowing down.

This is due to the increasing capacity of new cables and our appetite for high-quality video content. New cables are so efficient that the majority of potential capacity along major cable routes will come from cables that are less than five years old.

Traditionally, a consortium of telecom companies or governments would fund cable construction, but tech companies are increasingly funding their own submarine cable networks.

tech company submarine cables

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Amazon, Microsoft and Google own close to 65% market share in cloud data storage, so it’s understandable that they’d want to control the physical means of transporting that data as well.

These three companies now own 63,605 miles of submarine cable. While laying cable is a costly endeavor, it’s necessary to meet surging demand—content providers’ share of data transmission skyrocketed from around 8% to nearly 40% over the past decade.

A Bright Future for Dark Fiber

At the same time, more aging cables will be taken offline. Even though signals are no longer traveling through this network of “dark fiber”, it’s still being put to productive use. It turns out that undersea telecom cables make a very effective seismic network, helping researchers study offshore earthquakes and the geologic structures on the ocean floor.

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