Week 7 Flashcards
What is confirmation bias?
The tendency to seek only confirming evidence while failing to seek disconfirming evidence.
It affects how people search for, interpret, and remember information.
What is a solution to overcome confirmation bias?
Seek disconfirming information, bring an outsider, ask diagnostic rather than confirming questions.
These strategies help to counteract the effects of confirmation bias.
What is anchoring bias?
The fixation on an initial piece of information (anchor) and insufficient adjustment from it.
Estimates made in the presence of an anchor tend to be too close to that anchor.
What are the effects of anchoring bias?
Influences decisions even when the anchor is completely irrelevant and often beyond conscious awareness.
Adjustments made based on anchors are typically insufficient.
What is a solution to mitigate anchoring bias?
Be aware of the bias, collect many different estimates, take a step back and re-anchor.
These approaches can help reduce the impact of anchoring bias.
What is overconfidence in decision-making?
Unwarranted faith in one’s own perceptions and judgments, often leading to overestimating abilities.
Includes phenomena like the better-than-average effect and the Dunning-Kruger effect.
What is the planning fallacy?
The tendency to underestimate the time and cost required to complete a complex task.
This is a common manifestation of overconfidence.
What is a solution to counteract overconfidence?
Awareness, keeping objective records, recognizing that more information is not necessarily better, seeking disconfirming information.
These strategies can help individuals to make more accurate assessments.
What does availability bias refer to?
The tendency to base judgments on readily available information, often influenced by vividness or recency.
This can lead to an overestimation of the likelihood of frequent or recently recalled events.
What is escalation of commitment?
The tendency to allocate more resources to a failing course of action due to prior commitments.
This is often linked to the sunk cost fallacy.
What is the sunk cost fallacy?
The inclination to continue investing in a failing project due to previously invested resources.
Individuals may commit more resources even when the chances of success are low.
What is loss aversion?
A strong preference for avoiding losses over acquiring gains.
This phenomenon leads people to be more risk-seeking when faced with potential losses.
What is the endowment effect?
The tendency to place more value on things owned compared to the same objects not owned.
Loss of an object is perceived as more negative than the equivalent gain is positive.
What is a solution to address loss aversion?
Awareness, reframing to highlight potential gains, putting loss into perspective.
These strategies can help individuals overcome the negative impacts of loss aversion.
