Study sets, textbooks, questions
Upgrade to remove ads
Cognitive Biases: Problem 3: Need to Act Fast
Terms in this set (46)
Actor-observer bias / Fundamental attribution error
We are more likely to attribute our own actions to a particular situation vs. a generalization about our personality. We do the opposite with those we observe.
When we're faced with evidence against our beliefs, we reject the evidence and believe even more strongly.
We accept arguments in line with our beliefs vs. more rational ones that go against our beliefs.
Bike-shedding effect / Law of Triviality
We spend too much time on relatively minor but easy-to-grasp issues while neglecting more difficult and complex decisions.
We mistakenly assume that specific conditions are more probable than a single general one.
We have a specific change in preference between two options when we presented with a third option that is asymmetrically dominated.
Defensive attribution hypothesis
We believe mishaps that happen to other people, especially people less like us, are controllable and thus preventable.
We provide more articulate goals for lower priority areas of our lives.
In financial markets, we sell stocks that have risen and hold on to stocks that have fallen.
When we are low-ability in something, we overestimate our ability because we can't objectively evaluate our actual competence or incompetence.
We attribute greater value to something we worked hard to acquire or achieve.
We rely too heavily on our own perspective and think too highly of ourselves.
We ascribe more value to things merely because we own them.
False consensus effect
We overestimate the extent to which our opinions and beliefs are held by others.
Forer effect / Barnum effect
We give high accuracy ratings to personality descriptions that are vague and general enough to apply to a wide range of people.
We remember things that are generated from our own mind rather than simply read.
We overestimate the probability of succeeding at hard tasks and underestimate the likelihood of succeeding at easy ones.
IKEA effect / Processing difficulty effect
We place a disproportionally high value on products we partially created.
Illusion of control
We overestimate our ability to control events.
We overestimate our own qualities and abilities relative to other people.
We believe that the more information that can be acquired to make a decision, the better, even if that extra information is irrelevant for the decision.
Irrational escalation / Escalation of commitment
We invest additional resources in an apparently losing proposition, influenced by past resource investments.
Lake Wobegone effect
We overestimate our own abilities.
We prefer the lesser or smaller alternative of a proposition when evaluated separately, but not when evaluated together.
We prefer avoiding losses vs. making equivalent gains.
Among competing hypotheses, the one with the fewest assumptions should be selected.
We believe we are at a lesser risk of experiencing a negative event compared to others.
We perceive an outcome as certain when it is in fact uncertain.
Taking advantage of reactance, we convince people to do what we want by arguing that they do the opposite.
Aphorisms are judged as more accurate when written to rhyme.
Risk compensation / Peltzman effect
We become more careful when we sense greater risk and less careful when we feel protected.
We ascribe success to our own abilities and efforts, but ascribe failure to external factors
Social comparison bias
We feel competitiveness and dislike for those who we see as physically or mentally better than us.
Social desirability bias
We answer survey questions in a way that will be viewed favorably by others.
Status quo bias
We prefer the current state of affairs.
We think mass media messages have a greater effect on others than on ourselves.
Trait ascription bias
We describe our own behaviour in terms of situational factors while describing another's behaviour by ascribing fixed dispositions to their personality.
We want to complete a unit of a given item or task, regardless of the appropriateness of the unit size.
We prefer the complete elimination of a risk even when alternative options produce a greater reduction in risk overall.
We select options for which the probability of a favorable outcome is known over an option for which the probability of a favorable outcome is unknown
Appeal to novelty
We prematurely claim that an idea or proposal is correct or superior exclusively because it is new.
We choose a smaller-sooner reward over a larger-later reward
Identifiable victim effect
We offer greater aid when a specific, identifiable person is observed under hardship, as compared to a large, vaguely defined group with the same need.
We believe our judgement is more accurate than it actually is.
Sunk cost fallacy
Our aversion to loss makes it hard to abandon payments or investments which can no longer be recovered.
System justification / Reactance
We tend to rationalize or defend the existing systems we operate within.
Recommended textbook explanations
Krugman's Economics for AP*
David Anderson, Margaret Ray
Explorations in Economics
N. Gregory Mankiw
Foundations of Microeconomics
Michael Parkin, Robin Bade
Sets found in the same folder
Cognitive Biases: Problem 2: Not Enough Meaning
Cognitive Biases: Problem 1: Too Much Information
Cognitive Biases: Problem 4: What Should We Rememb…
Cognitive Biases: Memory Errors and Biases
Sets with similar terms
Why do economists often choose to present statistics in charts, tables, or graphs?
What are the 2 types of utility?
As discussed in the textbook, people's explicit (public) attitudes are not always consistent with their implicit (private) attitudes. This can occur as a result of:
Explain why the value function in the Prospect theory is S-shaped.