Week 2 - 4.3 Faulty Decision Making Flashcards
Overconfidence Bias
occurs when individuals overestimate their ability to predict future events. To avoid this bias, take the time to stop and ask yourself whether you are being realistic in your judgments.
Hindsight Bias
opposite to overconfidence bias, looking backward in time where mistakes made seem obvious after they have already occurred. Many individuals are likely to think that they already knew this was going to happen.
Anchoring
ely (confiar) too heavily on a single piece of information.
Framing Bias
tendency of decision makers to be influenced by the way that a situation or problem is presented. Depending on how a problem is presented to us, we might choose an alternative that is disadvantageous simply because of how it is framed.
Escalation of Commitment
individuals continue on a failing course of action after information reveals this may be a poor path to follow. Decision makers may not want to admit that they were wrong, may also believe that spending more time and energy might somehow help them recover their losses.