Behavioral biases

30問 • 1年前

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Maintaining one’s previous views or forecasts by insufficiently/ inadequately including/incorporating new contradicting information. Individuals tend to overweight their initial beliefs and are slow to react to new info.

Conservatism Bias

It is an inclination to seek or notice what confirms previous beliefs and to avoid any information that conflicts it.

Confirmation bias

a cognitive shortcut often used when gathering and interpreting information.

confirmation bias

It is the tendency to search for, interpret, favor and recall information in a way that confirms or supports prior beliefs.

confirmation bias

the first female professor to be tenured in Harvard University – first used her term “Illusion of Control” in her 1975 paper. The paper states that we are prone to overestimate our part in successes and underestimate it in our failures, ignoring the role of chance.

Ellen Langer

An urge to categorize new information based on previous experiences and classifications

representativeness bias

occurs when the similarity of objects or events confuses people’s thinking regarding the probability of an outcome. People frequently make the mistake of believing that two similar things or events are more closely correlated than they actually are.

representativeness bias

This tends the inclination/liking to predict the event before they happen and get imbibed with the feelings that people know it prior to that.

hindsight bias

A selective memory bias where an individual tend to remember correct views and forget mistakes.

hindsight bias

This occurs when an individual ALWAYS claims that he is right. With this claim, some may mistakenly believe that he can PREDICT an outcome. The belief that past events were predictable and foreseeable.

hindsight bias

the principle that states that our choices are influenced by the way things are presented or framed through different wordings, settings and situations.

framing bias

the tendency to be tied to the first impression and the first number that the mind is exposed to, regardless of it’s relevance to the evaluation/task at hand.

anchoring bias

pertains to those who rely too heavily on the first piece of information they receive—an “anchoring” fact— and base all subsequent judgments or opinions on this fact.

anchoring bias

Also known as the “two-pocket theory”, this is when we divide our money into separate categories according to subjective criteria, such as where the money came from or what we intend to use it for.

mental accounting bias

A mental shortcut by which one overestimates the importance or likelihood of something based on how easily an example or instance comes to mind.

availability bias

Focus on info that is easy to find, or focus on easily remembered past experiences, possibly depending on heuristics or rules of thumb.

availability bias

This was first demonstrated in a landmark study by Daniel Kahneman and Amos Tversky in March 1979.

the prospect theory

States that losses loom longer than gains. An individual/investor feels double the psychological and emotional impact of his loss compared to that of his gain.

loss aversion

Happens when confidence in our own judgement is greater than the objective accuracy of those judgements.

overconfidence bias

It gives the faulty notion of intuition, reasoning, and beliefs by overestimating one’s capabilities and underestimating an opponent.

overconfidence bias

the tendency to overestimate our abilities and talent. An individual/ investor overestimate his abilities and talent.

overconfidence bias

an emotional human- behavioral tendency that causes people to fail to act in pursuit of their long-term overarching goals because of a lack of self-discipline in the short term.

self-control bias

Inability to pursue long-term goals due to self- control issues. Opting for short term satisfaction rather focusing on long-term goals.

self-control bias

It is the tendency for people to overvalue and retain an object they already own than the same subject when they do not own it

endowment bias

The tendency to avoid making decisions that we fear we could later regret.

regret aversion bias

An emotional bias, which favors the current state of affairs. People tend to stick with the current or default option, even when superior alternatives are available.

status quo bias

the tendency to choose inaction over an action and the preference to stick with previously made decisions

status quo bias

the tendency to stay in the default or automatic option, avoiding complex or even easy decisions consciously or unconsciously.

default bias

This is the propensity for individuals to follow the actions of a larger group whether rational or irrational.

herd behavior bias

These are prone to observations which are led by filters of gained experiences.

human minds

Lesson 2

mjay rabena · 33問 · 1年前

Lesson 2