Week 2 - 4.3 Faulty Decision Making Flashcards

1
Q

Overconfidence Bias

A

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.

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2
Q

Hindsight Bias

A

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.

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3
Q

Anchoring

A

ely (confiar) too heavily on a single piece of information.

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4
Q

Framing Bias

A

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.

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5
Q

Escalation of Commitment

A

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.

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