The False Consensus Effect: When Our Optimistic Beliefs Skew Reality

Take the example of any political party in your country. The ruling party often believes that the majority of people are happy with their policies and decisions, but the reality can be different. During elections, the ruling party may claim overwhelming support and predict a landslide victory, only to find the actual results reflect otherwise. This highlights the false consensus effect, where they overestimate public approval.

In this article, I’ll dive deeper into this psychological bias and its impact.

What is The False consensus effect?

The assassination of Julius Caesar is a clear example of the false consensus effect, where people mistakenly believe that others share their views. In this case, Brutus and his fellow conspirators thought that many Romans would support their decision to kill Caesar, thinking it would save the Republic and bring back freedom.

However, they misjudged the situation, as Caesar was actually loved by most people. The public reaction was far from what they expected. This shows how easy it is to overestimate how common our beliefs are.

1. The root cause of The False consensus effect

The root cause of the false consensus effect lies in our natural tendency to connect with like-minded individuals. In school or college, we bond with those who share similar ideas and beliefs. However, as time passes, people’s beliefs and opinions evolve based on their experiences, but we often don’t notice these changes, leading to misunderstandings.

Misjudgment of Julius Cesar

Julius Caesar misjudged Brutus by believing he could trust him completely. As a close friend and ally, Caesar thought Brutus would always support him, viewing him as a loyal supporter of his rule. This trust led Caesar to underestimate Brutus’s ambition and the political pressures he faced.

Caesar failed to recognize that Brutus, influenced by his own ideals and the conspirators’ manipulation, was capable of betraying him. This misjudgment ultimately contributed to Caesar’s downfall, as he entered the Senate unguarded, believing he was safe with someone he considered a friend.

Caesar’s famous last words, "Et tu, Brute?" translates to "And you, Brutus?" in English. reflect this shock and betrayal, showcasing how deeply he miscalculated Brutus’s loyalty.

2. The False Consensus Effect in the Workplace.

When leaders or employees assume their decisions are accepted and followed without checking with others, it creates tension among colleagues. This misunderstanding can lead to miscommunication, bad decisions, and eventually, workplace conflicts. Here’s how to overcome this:

• Encourage Open Communication: Actively seek feedback and foster a culture where differing opinions are welcomed.
• Data-Driven Decisions: Use surveys, feedback tools, and data to understand the true perspectives of employees and clients.
• Diverse Perspectives: Encourage diverse voices in decision-making processes to avoid assumptions and groupthink.

3. False consensus Effect In Stock Market

We often buy stocks due to FOMO (fear of missing out), believing that everyone else is excited and positive about them, which leads us to think the stock will rise in value. However, when the stock starts falling, it’s because of the false consensus effect, where we wrongly assume most people share our optimism, even though the reality is different.

This false consensus effect blinds investors to the market’s negative sentiment, resulting in losses. When a stock reaches an all-time high, retail investors often lose patience and buy, assuming everyone is bullish and the stock will keep rising. But the reality is different, and they end up facing losses.

To overcome the tendency to buy stocks due to FOMO and the false consensus effect, consider the following strategies:

• Always prioritize fundamental and technical analysis of stocks rather than focusing on what others are buying or selling.
• Rather than purchasing a stock all at once, consider buying in smaller amounts over time. This approach allows you to adjust if needed.
• Avoid reacting to every piece of news about your stocks. Stay patient and disciplined, and with time, you’ll see good returns.

4. Corporate Case Study

Here are 10 companies where the false consensus effect may have played a role in their decision-making and eventual challenges:

1. Kodak – Overestimated the lasting popularity of film photography, missing the digital photography trend.
2. Blockbuster – Failed to recognize the shift toward online streaming and digital content, assuming customers would continue renting physical DVDs.
3. Nokia – Overestimated the dominance of its mobile phones, underestimating the rise of smartphones, particularly Apple’s iPhone and Android systems.
4. BlackBerry – Assumed that its secure email service and keyboard would remain popular, missing the touch-screen smartphone revolution.
5. Yahoo – Believed it could maintain dominance in search engines and online services, ignoring the rise of Google and failing to innovate fast enough.
6. MySpace – Assumed that its early success in social networking would keep it ahead of competitors, underestimating Facebook’s growing user base.
7. Sears – Believed that its traditional retail model would continue to attract customers, misjudging the shift towards e-commerce with Amazon.
8. Borders – Overestimated the demand for physical bookstores, missing the growth of e-books and online retailers like Amazon.
9. Toys “R” Us – Assumed that brick-and-mortar toy stores would continue to thrive without adapting to online retail competition.
10. Microsoft (Windows Phone) – Assumed its mobile platform could compete with iOS and Android without recognizing how far behind they were in the app ecosystem and user experience.

Studying these companies will reveal how overestimating shared beliefs or misreading market trends contributed to their struggles or failure.

5. How to Avoid the False Consensus Effect?

1. Taking feedback:

Whether you are a working professional or run a business, continuously seeking feedback about your products, services, or even leadership style is important to stay updated about the world around you. Regular feedback helps you identify blind spots, adapt to market trends, and ensure you’re not making assumptions about customer needs or team dynamics.

It encourages open communication, allows for course correction, and helps prevent the false consensus effect, where you may mistakenly believe that others share your views. Staying receptive to feedback fosters growth and keeps you aligned with reality.

2. Conducting Surveys:

Regularly conducting surveys about your products and services is a simple and effective way to understand what your customers really think. Surveys give you direct feedback on what people like, what needs improvement, and what they expect in the future. This helps you make better decisions and avoid assumptions about what customers want. It’s a great way to stay connected with your audience and ensure your business continues to meet their needs.

3. Respecting views of others:

In any organization, people will have different opinions. Instead of getting upset, we should respect those differences. Even if we don’t agree with someone’s ideas, we should listen and calmly share our own thoughts. This helps keep a positive atmosphere and gives us a better understanding of the real situation.

4. Have a Beginner’s Mindset (Shoshin):

Our mind forms an image of each person based on our experiences with them. Because of this, we often expect them to act in a certain way or perform tasks based on that image. But sometimes, we can be wrong and underestimate or overestimate their abilities. To avoid this, we should have a beginner’s mindset, which means not jumping to conclusions and looking at people’s skills and performance with an open mind, without any judgments.

5. Avoid FOMO:

Both FOMO and the False Consensus Effect make people compare themselves to others more. FOMO happens when you feel like you’re missing out on fun things others are doing, and the False Consensus Effect makes you believe that everyone else is doing the same thing. This creates a cycle where people feel pressure to join in because they think it’s what everyone else is doing.

FOMO often pushes people to take part in events or activities they don’t really enjoy, just to avoid feeling left out. The False Consensus Effect makes this worse because it leads people to believe that others care more about these activities than they actually do. This can make someone feel like they have to join in, or they’ll be the odd one out in their group.

6. Social Media and false consensus effect

Social media often gives us a false sense of what’s normal by showing us only the best parts of people’s lives or highlighting popular opinions. This creates a false perception, making us believe that what we see online is what everyone is doing or thinking. Over time, this can trick our minds into believing that certain behaviors or opinions are more common than they actually are.

For example, when we constantly see posts of people traveling, eating at fancy restaurants, or following fitness routines, we might start to think that everyone is doing these things, even if that’s not true. This can lead us to make wrong judgments about what’s normal, affecting how we see ourselves and others.

7. Real-life Example: Fitness Trends

Imagine seeing lots of posts from fitness influencers who show off their perfect bodies and intense workout routines. After a while, you might start to believe that most people are working out like that or look like them, even if that’s not the case. This can make you feel pressured to exercise more or feel bad about your own body, even though what you’re seeing is only a small slice of reality. Social media tricks us into thinking it’s what everyone is doing, but in reality, it’s not that common.

Conclusion:

The false consensus effect is a powerful psychological bias that influences our perception of what others think or do. From the assassination of Julius Caesar to modern-day social media and corporate decisions, it shows how easy it is to overestimate shared beliefs.

Misjudgments based on this effect can lead to serious consequences, such as the downfall of businesses, flawed leadership decisions, and personal insecurities. To avoid falling into this trap, it’s crucial to seek feedback, stay open to diverse perspectives, and recognize that what seems like a common belief may not be as widespread as we think.