Which two cognitive biases are commonly observed in decision-making during early adulthood, and what is a recommended mitigation?

• A. Optimism bias and confirmation bias; mitigations include journaling and self-reflection.
• B. Optimism bias and sunk cost fallacy; mitigations include seeking diverse perspectives and using structured decision processes.
• C. Hindsight bias and loss aversion; mitigations include delaying decisions.
• D. Anchoring and availability heuristic; mitigations include seeking second opinions.

Answer: (B)

When young adults make important choices, two biases commonly show up: optimism about positive outcomes and the idea that already sunk costs should keep you on a path. Optimism bias means you tend to overestimate how things will turn out and underestimate risks, which can lead to taking on debt, quitting steady work, or pursuing risky ventures with too little downside analysis. The sunk cost fallacy makes you feel you must continue with a course of action because you’ve already invested time, money, or effort, even when new information suggests a better option is available. This is why using diverse perspectives helps—hearing different viewpoints challenges that rosy forecast and helps reveal overlooked risks. A structured decision process, such as listing options, criteria, probabilities, and expected outcomes, forces you to evaluate trade-offs clearly and prevents past investments from unduly steering future choices. Together, these strategies address the main tendencies young adults face in decision-making by broadening insight and grounding choices in explicit criteria.