Availability bias leads to distorted decisionmaking from "summary" of Beyond Greed and Fear:Understanding Behavioral Finance and the Psychology of Investing by Hersh Shefrin
Availability bias is a cognitive shortcut that occurs when people make decisions based on information that is readily available to them. This bias can lead to distorted decision-making because it causes individuals to focus on information that is easily accessible, rather than on information that is more relevant or accurate. When people rely on information that is readily available, they may overlook important facts or overlook relevant details that could impact their decisions. One reason why availability bias can lead to distorted decision-making is that people tend to remember vivid or emotionally charged events more easily than mundane or less dramatic events. As a result, individuals may give more weight to information that is emotionally charged or sensational, even if it is not necessarily the most important or accurate information. This can lead to biased decision-making because people may focus on the wrong information or base their decisions on incomp...
Similar Posts
Macroeconomics looks at the economy as a whole, focusing on factors like inflation and unemployment
Macroeconomics is a branch of economics that looks at the big picture - the economy as a whole. It focuses on factors that affe...
Money is an emotional subject
Money is a topic that elicits a wide range of emotions from people. It can cause feelings of anxiety, fear, excitement, pride, ...
With reason as our guiding principle, we can create a better world for future generations
Reason, as a guiding principle, holds immense power in shaping the course of humanity's future. By allowing reason to illuminat...
Be aware of the selfserving bias
The selfserving bias is a common cognitive error that affects us all. It leads us to attribute our successes to our own skill a...
Social interactions influence cognition
Our brains are wired to constantly process information, make decisions, and interact with others. One key aspect of our cogniti...
Visualization: painting a picture in the mind
The concept of visualization is a powerful tool that allows us to paint a vivid picture in our minds. When we visualize somethi...
Building rapport is key
Building rapport with others is a crucial aspect of successful persuasion. When you take the time to establish a connection wit...
Valid arguments are based on logical reasoning
Valid arguments are those that are based on logical reasoning. This means that the conclusions drawn from the premises must fol...
Diversity of perspectives leads to innovation
Innovation thrives when there is a variety of perspectives at play. Think about it: if everyone looks at a problem in the same ...
Forensic evidence is not always as reliable as it seems
Forensic evidence holds a special place in the criminal justice system. It is often viewed as irrefutable, solid proof of a per...
