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…
Cognitive Bias: The Cognitive Zoo
The tendency to avoid options for which missing information makes the probability seem “unknown.”
Cognitive Bias: Anchoring effect
You have to hire one candidate among two for a given position. You look at the reports of the HR interviews and find the following key conclusions of the reports. Sophie: smart-kind-pretty-genereous-careless-messy-lazy…
Cognitive bias: The Marshmallow effect
Cognitive bias: Time preference. Is Your Dollar Worth More Today?
Cognitive biases and risk decision-making
Behavioral finance uses psychological insights to inform financial theory. Behavioral finance holds that we do not behave like the rational and self-interested agent of economic theories. Homo Sapiens is not…
The herding effect
We are all influenced by the opinions expressed by others when making decisions. This natural tendency results from the anchoring