Finals Flashcards
When we can see a clear
purpose or application for
something, our brains treat
it as valuable
Relevant
Our brains also keep recent
information more readily
accessible because it’s
useful for making
immediate decisions.
Recent
often feel
personally meaningful,
which increases our brain’s motivation to retain them.
Remarkable
is a rule
of thumb, or mental shortcut that
allows people to estimate the
probability of an outcome based on
how prevalent or familiar that
outcome appears in their lives.
Availability Bias
Ideas that are retrieved most
easily seem to be the most credible,
though it’s not necessarily in the case.
Retrievability
The attempt to categorize or
summon information matches a
certain reference.
Categorization
When a person possesses
too restrictive frame of reference
from which to formulate an
objective estimate.
Narrow range of experience
Individuals faced with a
positive outcome following a
decision would view that outcome
as a reflection of their ability and
skill. However, when faced with a
negative outcome, they would
ascribe it to bad luck or to someone
else’s intervention
Self attribution Bias
represents people’s propensity to
claim an irrational degree of credit for
their success.
Self Enhancing
Represents the corollary effect –
the irrational denial of responsibility
for failure.
Self protecting
Self Enhancing + self protecting =?
Self attribution Bias
is the
tendency of investors to believe that they
have a certain degree of control over the
outcomes of investment markets! Not all
investors believe that they have complete
control. However, a lot of them do believe
that they have some influence over the
market.
Illusion of control bias
Reasons why illusion of control bias
occurs:
- Desire to control
- Bias towards positivity
- Casualty vs. Correlation
is a mental process in which
people cling to their prior views or
forecasts at the expense of acknowledging
new information.
Conservatism bias
It refers to the fact that people like
to act in line with the things they have
already said, done or decide to do.
Consistency principle
Refers to a cosmological and planetary
theory, in which the Earth occupies the
central position of the world system.
Geocentrism
Is the astronomical model in which the
Earth and planets revolve around the
Sun at the center of the universe
Heliocentrism
tendency to favor the
known thing over the unknown, including
known risk over unknown risk.
Ambiguity Aversion Bias
exists because we
dislike uncertain situations.
Ambiguity Aversion Bias
When
presented with the unknown we’ll often
spend more time thinking about potential
drawbacks than potential benefits,
leading us to avoid ambiguous options.
Ambiguity Aversion Bias
