Investors are always looking for ways to evaluate the potential of a startup before making a substantial investment, which is a challenging task for a company with little to no history. Instead, investors rely on independent research. Each type of research has its strengths and can be beneficial in different situations. Corporate research can lead to new technologies and products that drive economic growth, while university research expands the boundaries of human knowledge and often leads to unexpected breakthroughs and applications.
Market research plays a crucial role in guiding business decisions, product development, and marketing strategies. However, the presence of bias in various stages of the research process can distort results, leading to inaccurate insights and potentially detrimental outcomes. This thesis examines the types, causes, and consequences of bias in market research, and proposes strategies to mitigate its influence and enhance the validity of research findings. Here are some common forms of bias to keep in mind when consuming research.
Confirmation Bias The tendency to seek, interpret, or favor information that confirms preexisting beliefs or assumptions, while ignoring or discounting conflicting evidence.
Availability Bias Relying heavily on immediate examples or information that comes to mind easily, rather than considering a broader range of possibilities or seeking additional data.
Anchoring Bias The tendency to rely too heavily on the first piece of information encountered (the "anchor") when making subsequent judgments or decisions.
Overconfidence Bias Having excessive confidence in one's own judgments or abilities, leading to an overestimation of accuracy or a failure to consider potential risks or limitations.
Framing Bias The way information is presented or framed can influence decision making. People may respond differently to the same information depending on how it is presented (e.g., as a loss or a gain).
Hindsight Bias The tendency to perceive events as more predictable than they actually were before they occurred. After an event, people may believe that they "knew it all along" and overestimate their ability to have predicted the outcome.