Wednesday, 28 October 2015

20 common cognitive biases, plus more

I've written a number of posts about behavioural economics and the implications of various cognitive biases (you can see a selection of them under the 'behavioural economics' tag). Business Insider Australia recently provided the following handy summary of 20 common cognitive biases that affect our decision-making:

Although, I note that they've missed some pretty important ones from a behavioural economics perspective, like the illusion of knowledge (we think we know more than we actually do), present bias (we tend to heavily discount things that will happen in the future relative to things that will happen in the future), loss aversion (we value losses much more than we do equivalent gains), mental accounting (we keep mental accounts that we like to keep in positive balances), status quo bias (we don't like to change our minds), and framing (how a problem is framed can make a difference for the choices we make). Still, it's a handy reference list for some of the many biases we hold.

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