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Recency Bias

Recency Bias is a cognitive bias that favors recent events over historic ones. People tend to weigh recent information more heavily than older information when making decisions, often at the expense of long-term patterns or base rates.

Definition

Recency bias occurs when people give greater weight to recent events when making decisions, evaluating performance, or forming judgments. This bias stems from the way human memory works – recent events are more easily recalled and feel more relevant.

Psychological Mechanisms

  • Availability Heuristic: Recent events are more mentally available and easier to recall

  • Memory decay: Older information fades from memory over time

  • Emotional intensity: Recent events often carry stronger emotional weight

  • Pattern misrecognition: Recent trends may be mistaken for permanent changes

Common Examples

Investment Decisions

  • Buying stocks after recent gains, selling after recent losses

  • Overreacting to quarterly earnings reports

  • Ignoring long-term market trends

Performance Evaluation

  • Annual reviews focusing on recent months rather than entire year

  • Sports analysts overweighting recent games

  • Hiring decisions based on most recent interview impressions

Risk Assessment

  • Overestimating risks after recent negative events (plane crashes, natural disasters)

  • Underestimating risks during calm periods

Impact Areas

  1. Financial markets: Short-term volatility driven by recent news

  2. Performance reviews: Unfair evaluations based on recent work

  3. Risk management: Poor long-term planning

  4. Medical diagnosis: Overweighting recent symptoms

  5. Historical analysis: Misunderstanding long-term trends

Mitigation Strategies

  • Systematic record-keeping: Maintain logs of past performance and decisions

  • Historical analysis: Deliberately review longer time periods

  • Base rate consideration: Always consider long-term averages

  • Decision frameworks: Use structured approaches that weight time periods appropriately

  • External perspectives: Seek input from others with different temporal viewpoints

  • Primacy Effect: The opposite bias favoring first impressions

  • Availability Heuristic: Mental shortcuts based on easily recalled information

  • Hot-hand fallacy: Believing recent success predicts continued success