Cognitive bias: Gambler’s Fallacy
You need to recruit a junior manager for your retail department. You know that a lot of people are qualified for this job, equally men and women. Today, you are supposed to…
Cognitive Bias: Conjunction Fallacy
We work in an international import/export firm with an extremely large distribution of our products worldwide. We have just received
Cognitive Bias: The law of small numbers
A study carried out by an eminent institution in a poor, tropical country reveals that 20% of the inhabitants of a small rural village have a psychological disease, whose average…
Cognitive Bias: Simultaneous vs. Sequential Choice
Cognitive Bias: Simultaneous vs. Sequential Choice
Cognitive Bias: Familiarity bias
Do you prefer to bet on the decrease of the Dow Jones or the CAC40 on the first of next September? These questions have been asked in many economic experiments…
Cognitive Bias: Thinking Fast and Slow …
Cognitive Bias: Thinking Fast and Slow…
Cognitive Bias: Base Rate Fallacy
If a test to detect a disease whose prevalence is 1/1000 has a false positive rate of 5%, what is the chance that a person found to have a positive…
Cognitive Bias: The framing effect
You are the head of an industrial company operating 600 plants with severe economic problems. After discussion with your strategic
Behavioral finance, risk profiling and Prospect Theory
Prospect Theory is one of the most famous behavioral finance theory. It describes how investors make decision under risk. A short insight in this article.
Cognitive Bias: ambiguity aversion
As an investor, you have three investment options for the next semester: You get €500.000 for sure You invest in a stock with a 50% of chance of earning €1M…