Biases

Question 1

Over Confidence

Answer 1

Cognitive Bias: generally unwarranted faith in one’s intuitive reasoning, judgement and cognitive abilities

Question 2

Representativeness

Answer 2

Cognitive Bias: incorrect understanding of new element that often persists and biases future interactions with that element

Question 3

Hindsight

Answer 3

Cognitive Bias: the belief that the outcome of an event was predictable, even if it was not. Over estimation of accuracy of their own predictions

Question 4

Availability

Answer 4

Cognitive Bias: allows people to estimate the probability of an outcome based on how prevalent or familiar that outcome appears in their lives

Question 5

Endowment

Answer 5

Emotional Bias: place more value in an asset they hold property rights to than an asset they do not hold property rights to

Question 6

Loss Aversion

Answer 6

Emotional Bias: people generally feel stronger impulse to avoid losses than to acquire gains

Question 7

Regret Aversion

Answer 7

Emotional Bias: to avoid making decisions because they fear that whatever they decide to do will result in a bad decision

Question 8

Status Quo

Answer 8

Emotional Bias: predisposes people when faced with a wide variety of options to choose to keep things the same