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What is the name of a cognitive bias where a person takes all of their knowledge of a particular subject (at a point in time) and arranges it in a hypothesis or world model that makes sense to that individual?

In particular I'm thinking of Sigmund Freud and his work on the interpretation of dreams. It seems to me that he took what he knew at the time and arranged it in a hypothesis, selectively including or excluding facts to the point where he deemed just about everything in dreams, from hats to stairs to buildings and mountains in dreams as referring to sexual content.

I believe that Freud himself, in his book mentions that before him people were evaluating dreams as various influences of spirits or divines. A modern researcher might interpret dreams as a product of interaction of brain regions and neurotransmitter systems.

Is this a cognitive bias or a general way in which a certain kind of brain (rational temperament) works?

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    $\begingroup$ I think you are referring to confirmation bias. $\endgroup$ – Philip Nov 17 '14 at 15:55
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"I think you are referring to confirmation bias" (from wikipedia)

Confirmation bias, also called myside bias, is the tendency to search for, interpret, or prioritize information in a way that confirms one's beliefs or hypotheses. It is a type of cognitive bias and a systematic error of inductive reasoning. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. The effect is stronger for emotionally charged issues and for deeply entrenched beliefs. People also tend to interpret ambiguous evidence as supporting their existing position.

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