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Psychology > Cognitive Biases in Behavioral Economics > Flashcards

Cognitive Biases in Behavioral Economics Flashcards

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1
Q

What is the Anchoring Bias?

A

Anchoring Bias refers to relying too heavily on the first piece of information when making decisions.

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2
Q

What is the Availability Heuristic?

A

Availability Heuristic is the tendency to estimate the likelihood of events based on their availability in memory.

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3
Q

What is Confirmation Bias?

A

Confirmation Bias is the tendency to search for, interpret, and remember information that confirms one’s preconceptions.

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4
Q

Fill in the blank: Overestimating one’s knowledge or abilities is called __________.

A

Overconfidence Bias.

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5
Q

What is Loss Aversion?

A

Loss Aversion refers to the tendency to prefer avoiding losses rather than acquiring equivalent gains.

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6
Q

What is the Status Quo Bias?

A

Status Quo Bias is the preference for the current state of affairs and resistance to change.

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7
Q

How does the Framing Effect influence decisions?

A

The Framing Effect influences decisions based on how information is presented, such as in a positive or negative light.

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8
Q

What is the Hindsight Bias?

A

Hindsight Bias is the belief that past events were predictable after they have already happened.

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9
Q

Fill in the blank: The Endowment Effect refers to valuing owned items ________ than non-owned ones.

A

more.

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10
Q

What is the Gambler’s Fallacy?

A

Gambler’s Fallacy is the belief that past random events influence future outcomes.

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11
Q

What is the Sunk Cost Fallacy?

A

Sunk Cost Fallacy is the tendency to continue a project because of previously invested resources, even if it no longer makes sense.

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12
Q

What is Self-Serving Bias?

A

Self-Serving Bias is attributing success to oneself and failures to external factors.

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13
Q

What is the Bandwagon Effect?

A

Bandwagon Effect is adopting beliefs or behaviors because others are doing so.

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14
Q

How does the Halo Effect distort judgment?

A

Halo Effect is when an overall impression of someone influences specific judgments about them.

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15
Q

What is Recency Bias?

A

Recency Bias is giving more weight to recent events compared to earlier ones.

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16
Q

What is Cognitive Dissonance?

A

Cognitive Dissonance is the mental discomfort from holding two conflicting beliefs or behaviors.

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17
Q

What is the Decoy Effect?

A

Decoy Effect is when the introduction of a third option changes preferences between two other options.

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18
Q

What is Survivorship Bias?

A

Survivorship Bias is focusing on successful cases while ignoring the failures.

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19
Q

Fill in the blank: Overestimating one’s ability to control events is called the ________.

A

Illusion of Control.

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20
Q

What is the Planning Fallacy?

A

Planning Fallacy is underestimating the time or resources needed to complete a task.

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21
Q

What is Optimism Bias?

A

Optimism Bias is the belief that one is less likely to experience negative events compared to others.

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22
Q

What is the Base Rate Fallacy?

A

Base Rate Fallacy is ignoring general information (base rates) in favor of specific information.

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23
Q

Fill in the blank: Overestimating how much others agree with you is known as __________.

A

False Consensus Effect.

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24
Q

What is the Just-World Hypothesis?

A

Just-World Hypothesis is the belief that people get what they deserve in life.

25
Q

What is Hyperbolic Discounting?

A

Hyperbolic Discounting is favoring smaller, immediate rewards over larger, future rewards.

26
Q

What does Prospect Theory explain?

A

Prospect Theory explains how people value gains and losses differently, leading to irrational decisions.

27
Q

What is Attribution Bias?

A

Attribution Bias refers to misattributing causes of behavior based on one’s own biases.

28
Q

What is the Dunning-Kruger Effect?

A

Dunning-Kruger Effect is when people with low ability overestimate their competence.

29
Q

What is the Primacy Effect?

A

Primacy Effect is placing more importance on the first information received.

30
Q

What is Negativity Bias?

A

Negativity Bias is the tendency to focus more on negative events than positive ones.

31
Q

What is Actor-Observer Bias?

A

Actor-Observer Bias is attributing your actions to external causes while attributing others’ actions to internal causes.

32
Q

What is the Ambiguity Effect?

A

Ambiguity Effect is avoiding options where the probability of outcomes is unknown.

33
Q

Fill in the blank: Engaging in riskier behavior when feeling more secure is called __________.

A

Risk Compensation.

34
Q

What is the Pro-Innovation Bias?

A

Pro-Innovation Bias is overvaluing new technology simply because it is new.

35
Q

What is the Default Effect?

A

Default Effect is the tendency to stick with pre-selected or default options.

36
Q

What is the IKEA Effect?

A

IKEA Effect is the tendency to overvalue products that one has partially created.

37
Q

Fill in the blank: Liking something more simply because it is familiar is called the __________.

A

Mere Exposure Effect.

38
Q

What is Choice-Supportive Bias?

A

Choice-Supportive Bias is remembering one’s choices as better than they actually were.

39
Q

What is Escalation of Commitment?

A

Escalation of Commitment is increasing investment in a failing course of action.

40
Q

What is Omission Bias?

A

Omission Bias is the preference for inaction over action due to the fear of being responsible for negative outcomes.

41
Q

What is Social Desirability Bias?

A

Social Desirability Bias is responding in a way that is seen as socially acceptable rather than truthful.

42
Q

Fill in the blank: Believing vague statements are personally relevant, as in horoscopes, is called the __________.

A

Forer Effect.

43
Q

What is Authority Bias?

A

Authority Bias is placing too much value on the opinions of authority figures.

44
Q

What is Ingroup Bias?

A

Ingroup Bias is favoring members of one’s own group over others.

45
Q

What is Outcome Bias?

A

Outcome Bias is judging decisions based on their outcomes rather than the process that led to them.

46
Q

What is the Pseudocertainty Effect?

A

Pseudocertainty Effect is focusing on certain outcomes in risky situations, ignoring the full range of probabilities.

47
Q

What is Reactance?

A

Reactance is doing the opposite of what one is told because of a perceived loss of freedom.

48
Q

What is the Law of Small Numbers?

A

Law of Small Numbers is drawing broad conclusions from small sample sizes.

49
Q

Fill in the blank: When trends appear differently based on how data is grouped, it is known as __________.

A

Simpson’s Paradox.

50
Q

What is the Time-Saving Bias?

A

Time-Saving Bias is misjudging how much time is saved by certain actions.

51
Q

What is the Uncertainty Effect?

A

Uncertainty Effect is avoiding choices with uncertain outcomes, even when the outcomes could be positive.

52
Q

What is the Zero-Sum Bias?

A

Zero-Sum Bias is the belief that one party’s gain must result in another party’s loss.

53
Q

What is the Hot-Hand Fallacy?

A

Hot-Hand Fallacy is the belief that a person who has experienced success is more likely to continue succeeding.

54
Q

What is the Placebo Effect?

A

Placebo Effect is improvement resulting from the belief in the effectiveness of an inert treatment.

55
Q

What is the Peltzman Effect?

A

Peltzman Effect is the increase in risky behavior after safety measures have been implemented.

56
Q

What is Stereotyping?

A

Stereotyping is assuming that individuals have certain characteristics based on their membership in a particular group.

57
Q

What is the Paradox of Choice?

A

Paradox of Choice is the phenomenon where having too many options can lead to decision paralysis.

58
Q

What is Belief Bias?

A

Belief Bias is accepting or rejecting arguments based on one’s beliefs rather than on logical reasoning.

59
Q

Fill in the blank: People are more likely to help specific individuals rather than groups, which is known as the __________.

A

Identifiable Victim Effect.

Psychology (13 decks)

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