A new study co-authored by the London School of Economics (LSE), King’s College London and Bayes Business School has introduced a framework to help organisations mitigate cognitive biases in decision-making.
The research, published in the Journal of Management, was led by Dr Barbara Fasolo of LSE’s Department of Management, alongside Professor Irene Scopelliti and Dr Claire Heard. It integrates findings from 100 experimental studies to identify two key approaches to bias mitigation.
The framework categorises strategies into two main types: debiasing, which directly engages with decision-makers to help them recognise and counter biases, and choice architecture, which modifies the decision-making environment to influence choices. Each approach is suited to different organisational contexts and decision-making scenarios.
Debiasing interventions include training programmes that educate employees about cognitive biases, warnings that highlight potential biases in specific situations, and feedback mechanisms that allow individuals to learn from past decisions. These methods aim to improve decision-making skills by fostering awareness and critical evaluation.
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Choice architecture, on the other hand, seeks to shape decisions by altering how options are presented. This can include restructuring the way information is displayed, adjusting default settings, or reframing alternatives. Instead of changing the way people think, this method focuses on influencing behaviour through environmental modifications.
Matching Bias Mitigation Strategies to Organisational Needs
The research identifies some key factors that determine when each approach is most effective. One consideration is the stage of the decision-making process. Debiasing is more effective in the early stages, when organisations are still gathering information and identifying alternatives. Training and warnings at this point can help employees recognise biases before decisions are made. In contrast, choice architecture is more suitable for later stages, when alternatives have already been evaluated and a decision is about to be finalised.
The level of uncertainty and complexity in a decision also influences the choice of strategy. In unpredictable environments with complex, unstructured decisions, debiasing interventions help develop transferable skills that can be applied across different situations. Choice architecture, however, works best in routine and structured environments, where decision-makers can rely on clearly defined optimal choices.
Organisational trust plays a role in determining the effectiveness of choice architecture interventions. Employees must trust that those designing decision structures have their best interests in mind. In contrast, debiasing interventions, which rely on transparency and active participation, can build trust by openly communicating objectives and expected outcomes.
Applying Bias Mitigation in Different Workplaces
Dr Barbara Fasolo said, “Cognitive biases can severely impact organisational performance, from excessive market entry to discrimination in hiring and suboptimal capital allocations. While extensive research shows how biases affect organisations, there is less focus on how to effectively reduce them.”
The framework considers factors such as goal alignment, employee turnover, and cognitive resources. Organisations with well-defined and shared evaluation criteria benefit more from choice architecture, while those with diverse goals may find debiasing more suitable. High-turnover workplaces may prefer choice architecture, as it focuses on adjusting the environment rather than relying on individual learning.
In contrast, organisations with stable workforces can gain long-term benefits from debiasing, as employees develop skills that improve decision-making over time.
Dr Fasolo added, “We draw a clear distinction between two distinct approaches to bias mitigation, based on how they work and how they have been tested experimentally. The debiasing approach equips people with tools to recognise and counter biases themselves, while choice architecture modifies the decision environment to make better choices more intuitive.
“Understanding when to use each approach – or combine them – is crucial for organisational success.”
