One of the major points about behavioral biases is that they are shortcuts that humans make to deal with certain situations. Shortcuts can either work for or against the person using them.
Because our world is so complex and to think in depth about each move we make would be overly burdensome, we develop shortcuts to easily deal with certain situations and events.
For example, if there is a fire in a building, we run out of the building with the crowd. In this situation, the reaction works well, but in others, the shortcut creates a disaster, such as selling securities in a falling market. The shortcut is initated by a particular action or activity that we react to in a mechanical manor. After the shortcut is firmly established, we fail to reconsider the circumstances and continue to act in a mechanical, automated manor, often without even being aware.
Being aware of the shortcuts is critical to effectively combating them.
Testimonials are an example of the social proof shortcut. If you see an actor who is similar to yourself using a product, you are much more likely to accept its use. Remember the old Jiff Peanut Butter commercial? "Nine out of ten choosey mothers choose Jiff." Well....I am a choosey discriminating mother you may say. I should buy Jiff. Got Ya!
Sales people often use many of these techniques upon us without us even knowing.
It is an interesting book on psychology that both Warren Buffett and Charlie Munger recommend. It is clear to me why they recommend it. The use of shortcuts can and do have negative effects upon our long term investment rates of return.
We are all constantly trying to understand ourselves. This book will take us a long way on that critical journey. Not only will you find it informative, but entertaining as well.