March 12, 2026 · BEHAVIORAL FINANCE

The Biases That Cost Institutions Millions

Individual investors have biases. Institutional investors have the same biases with larger position sizes.

Anchoring in Committee

When a senior committee member speaks first, subsequent members anchor to that initial view. Research shows this effect persists even among experienced professionals. The result is false consensus — a group that appears to agree because they were influenced by the first voice in the room.

Our committee addresses this by requiring written, independent assessments before any group discussion. Each member submits their analysis without knowing what others have written. Only after all positions are locked does the debate begin.

Confirmation Bias at Scale

Institutional research departments are particularly susceptible to confirmation bias. Once a thesis is established, subsequent analysis tends to confirm rather than challenge it. This is not intellectual laziness — it is a fundamental feature of human cognition that scales with organizational size.

Our adversarial structure — where departments explicitly disagree by design — is a systematic response to this bias. When every idea must survive challenge from multiple independent perspectives, weak theses are eliminated before they reach the decision stage.

This content is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results.
← Back to Blog