They happen when we over-index on some information / consequences while we ignore or under-index on other information / consequences. For instance, signing up for a new job while over-indexing on the role and the benefits and under-indexing on the commute and long-term viability of the company might lead to a bad decision. 

They also happen when we think we can make some corrections later on or that "we'll figure it out along the way". 

And finally, they happen when we confuse irreversible decisions with reversible decisions. These are popularized as one-way door and two-way doors. A two-way door is one that you can walk through and it doesn't close on you. You can walk back to where you started if you don't like what's on the other side. But once you walk through a one-way door, there's no coming back. Behaving with a one-way door as though it's a two-way door (and vice versa) usually leads to bad decisions. 

A look back on some bad decisions will tell us why we are prone to making them. And we can learn from that to avoid making them again.