1-mindware Tools Flashcards
Fundamental attribution error
Tendency to attribute others actions to their disposition while attributing your own to context and situational variance.
Cognitive dissonance
Having inconsistent thoughts or beliefs in comparison to behavior and actions.
Cognitive Dissonance Theory (Pascal)
A change of behaviors will reduce dissonance or cause a change in attitude, either of which will result in corrected equilibrium.
When making a decision, economists suggest using a(n) ___________________.
Cost-benefit analysis
Sunk cost principal
Only future benefits and costs should figure into your choices.
Opportunity costs
The costs of engaging in a given course of action, thereby losing the benefit of the next action.
Ex. Playing football instead of basketball.
Need evaluating when deciding between two similar costs
Aversion to loss theory
People will generally choose to avoid losses even when the odds or payout are heavily in their favor.
They avoid loss in place of acquiring equivalent gains.
Ex. Better to not lose $5 than to gain $5
Endowment effect
People ascribe more value to items, simply because they own them.
The law of large numbers
The higher the sample size, the more accurate the prediction or conclusion.
Status quo bias
Human desire to maintain the status quo even when its not in their best interest
Illusory correlation
Tendency for humans to assume correlations exist where they do not.
Dichotomous
Either/or
Confirmation bias
Tendency to look for data to support our conclusions and ignore data that refutes it.
Regression to the mean
Extreme events will be corrected by a pull towards the average
Representativeness heuristic
If a is similar to b, we’re likely to see a relationship between them even if none exist.
