Self-Attribution Bias: Your Gateway to Narcissism
Created on 09 Aug 2022
Wraps up in 5 Min
Read by 614 people
Updated on 11 Sep 2022
A: Did you earn any profit from your latest investment?
B: Umm, not really; it didn't go as I thought.
A: Oh! Didn't you say you knew the rules and could avoid losses?
B: Of course I do! It is just I got unlucky this time.
Does this exchange sound familiar? Everyone must have experienced a situation like this at least once in their life. Whenever there is an achievement, people credit their exceptional skills.
Failure, however, only happens because external forces take an adverse turn. No one likes taking accountability when it comes to poor performance. It is a common habit cultivated by almost everyone. Many may not know about it, but this behavioural trait is known as self-attribution bias.
People often recognise this phenomenon (in others more than themselves) but do not know its name. Worry not, though; through this article, one can decode the definition of self-attribution bias.
What is Self-Attribution Bias?
"What makes the bias particularly pernicious is that we all recognize this bias in others but not in ourselves." - Richard H. Thaler.
Self-serving bias is a cognitive bias where one takes credit for their achievements and blames external factors when things turn downhill. One can easily find it in every other person. It is a debatable concept in psychology and has fascinated researchers for decades.
However, finance research has contemplated self-attribution bias for a while. It is one of the ruling factors that boost the confidence of investors to invest more. They appreciate themselves for positive and high profits when it goes their way but claim that luck was not with them in other cases.
A continuous gain in the financial market often makes investors overconfident, leading them to believe they have control of the market. This results in unreasonable actions and investments. Behavioural finance states that feelings and behaviour play a pivotal role in the decision-making process of investors and dealers, with the "bad-luck" card always available as a scapegoat
Self-attribution bias can be observed in several situations. Examples of Self-attribution bias are:
Sports are prime examples of self-attribution bias. Many athletes contribute their wins to practice and teamwork. However, it is a bad call or the referee's fault when their team loses.
When someone gets a job, it is due to their qualifications and abilities. But, the reason for their previous failures to secure a job is the interviewer did not like them.
Where does this Self-Attribution Bias occur?
We can often remember the first instances of self-attribution bias in our lives. It began around the same time for many of us. It was all thanks to our skills when we got good grades, but it was either the teacher's fault or bad luck whenever the scores weren't up to par.
It started as something harmless and usual, but its side effects became apparent with time. Now, it is one of the most researched topics in different capacities. Neural experimentation, naturalistic investigation, and laboratory testing are employed to figure out this cognitive bias, its relation, and ways to reduce it.
Why does Self-Attribution Bias happen?
Self-attribution bias is common, and one can see it in all age groups. As per the studies conducted, researchers have found some reasons that may be the cause of self-serving bias:
It is one of the prominent factors that lead to the birth of self-attribution bias. We appreciate our success and give ourselves credit to feel good. Accepting one was unable to reach the goal because of others rather than their own faults is much easier to process as it helps preserve one's self-esteem.
Humans think funnily. Instead of their views, what others think of them matters more. Therefore, they present themselves not the way they are but how others would like them to be. They attribute their successes to themselves to improve their external image. However, failures are not accepted to avoid the degradation of this image.
3. Age and Culture
Self-serving bias does not develop and end at specific ages. It is an aspect of a person's psyche that stays with them for their entire life. A person might reduce the degree of bias through self-realisation but might possess it irrespective of age and culture.
4. Unrealistic optimism
For many people, it is either extreme pessimism or unrealistic optimism; there is no "middle ground" between the two. Being optimistic is not an issue as long as you are aware of your actions. But shifting blame to maintain ignorant optimism in the face of adverse reality can have severe repercussions.
Self Attribution in Investors
The Indian stock market is one of the biggest human congregations, with over 7 crore active participants. Naturally, with so many psyches comes various biases. The investors' playground is no stranger to self-attribution bias.
As investors of various capacities pour their valuable funds into the bourses, they do not want the blame for their investments going kaput. The reason is that accepting blame would mean that they own up to being the person that lost their own money. Blaming market sentiments, market volatility, or several other reasons is always the better option. What are the accused going to do, fight back?
On the other hand, even the slightest green in someone's portfolio is pure skill. None of the aforementioned variables gets a crumb of recognition for any growth of capital or returns earned.
This fluctuation of ego causes manic buying or panic selling in investors without any legitimate reasons for their actions. From "Bechara Investor" to "Jhunjhunwala 2.0", oh, how quickly people's perspectives change.
How can you reduce Self-Attribution bias?
Is there any way to eliminate this bias? Well, one can not just root it out from their life because it is a psychological phenomenon. But people can reduce its appearance and influence in their lives. One can use several coping and self-help strategies to keep the self-serving bias in control:
Meditation, yoga, and reading books can keep your behaviour in check. Better mindfulness and improvement of knowledge help correct one's premature
Be compassionate to others as well as yourself. Blaming others won't fix your mistakes, and accepting your faults will not reduce your value.
Stay reasonably optimistic. Do not let the need to be right cloud the reality of matters from you.
The Bottom Line
To be honest, it is a natural human tendency to be a hypocrite. When someone else fails, it is entirely that person's fault; but when we face negative results, it is because of things that are "out of our hands".
Self-serving bias stems from the drive to overcome adversity for personal improvement. Hence, as said before, there should be a limit that one must not cross. Severe cases of self-attribution bias can turn one into a narcissist. It affects the thinking process of an individual as this behaviour is not sensible and logical.
As Craig D. Lounsbrough said, "Self-serving biases and self-centred agendas are cotton-jammed in the ears of our conscience. Even if the truth shouts, we can't hear it."
Let us know your thoughts about the self-attribution bias and if it serves a vital purpose in our lives in the comments. Do share the article with your friends!