Cognitive Bias: the Ellsberg paradox
You are a professional investor are offered to invest in different projects in the short term. Bias as the Ellsberg paradox can influence you. Situation 1 Investment 1: if an…
Can we set goals unconsciously?
What is the goal of our action? We are not always able to answer this question, but our neurons do! Our brain can indeed set goals, even complex ones, outside…
Cognitive Bias: limitation of traditional questionnaires
What is the dream destination of our potential Chinese clients? Hong-Ko ng or Tokyo? A logical approach would be to first analyze data on tourism in both cities and run…
I’m biased, is it serious ?
What is rationality? The basics of behavioral finance is that people do not behave rationally, contrary to what is supposed by traditional economic theories. Homo sapiens is not Homo oeconomicus. Our decisions…
Cognitive Bias: implicit associations
What implicit associations do we make when making decisions? Let’s have a look at this yogurt. What kind of conceptual associations does our brain make when faced whith this yogurt?…
Cognitive Bias: Partition Dependence Bias
You have to allocate some resources among three business units of your firm, located on three different continents. Let’s say the three business units have the same needs and profitability.…
Sustainability preferences: the limit of self-assessment
A growing appetite for sustainability The growth of SRI, or socially responsible investment, is closely linked to European regulations, which are gradually shaping its contours. The MiFIDII law and the…
Cognitive bias: representativeness bias
You have just invested in a new fund specialized in Agrotech. The funds has increased by 30% this month. What is the most likely explanation of this huge increase? The…
Cognitive bias: Unit dependence and naive diversification
Naive diversification and unit dependence Let's make a simple case study so you will easily understand the unit dependence bias and naive diversification. You are given $20,000 by a relative.…
Cognitive Bias: Change blindness
Look at the video below. https://youtu.be/IGQmdoK_ZfY Did you see the trick? If not, watch the video again more carefully! This video is a famous example of change blindness. Change blindness…