Articles Tagged: Behavioral Economics

Articles

• Affect Heuristic - A cognitive bias where people rely on emotions rather than objective information for decision-making, leading to quick but potentially biased judgments.
• Ambiguity Aversion - The psychological tendency to prefer known risks over unknown risks, even when potential payoffs are equal or lower.
• Anchoring Bias - Anchoring bias is a cognitive tendency to rely too heavily on the first piece of information encountered, using it as a reference point that influences subsequent judgments.
• Anchoring Effect - A cognitive bias where individuals rely too heavily on the first piece of information encountered, using it as a reference point for subsequent decisions.
• Antifragility - A concept describing systems that not only withstand shocks but actively thrive and benefit from them, going beyond mere resilience or robustness.
• Attribution Theory - Explore how individuals interpret and explain the causes of behavior and events, shaping our understanding, emotions, and actions.
• Attributional Style - Attributional style is an individual's consistent way of explaining the causes of events, significantly impacting emotions, motivation, and behavior.
• Availability Heuristic - A cognitive bias where easily recalled information is overestimated in importance or likelihood.
• Bandwagon Effect - The bandwagon effect is a psychological phenomenon where individuals adopt certain behaviors, beliefs, or attitudes simply because others are doing so, often driven by a desire to belong.
• Base Rate Neglect - A cognitive bias where individuals overlook general statistical information in favor of specific, vivid details when making probability judgments.
• Cognitive Dissonance - The psychological tension and discomfort experienced when holding conflicting beliefs, attitudes, or behaviors, and the drive to reduce this inconsistency.
• Commitment and Consistency - A deep-seated psychological principle driving individuals to align their actions and beliefs with their past commitments to maintain a stable self-image.
• Compromise Effect - A cognitive bias where individuals tend to choose a middle option in a set of choices, often influenced by avoiding extremes.
• Confirmation Bias - A pervasive cognitive tendency where individuals actively seek, interpret, favor, and recall information that confirms their existing beliefs or values.
• Decoy Effect (Asymmetric Dominance) - Understand how introducing a strategically inferior option can manipulate choices and make another option appear more appealing.
• Effort Justification - The psychological tendency to value outcomes more highly when significant effort has been invested in achieving them.
• Endowment Effect - The endowment effect is a cognitive bias where people value items they own more highly than identical items they do not own, leading to a reluctance to sell.
• Ensemble Averaging - A powerful statistical technique combining multiple individual outputs to achieve more robust and accurate results, with applications in perception, decision-making, and machine learning.
• Flow State - A psychological state of complete immersion and energized focus in an activity, leading to enjoyment and optimal performance.
• Foot-in-the-Door Technique - A persuasive strategy that leverages initial small commitments to increase compliance with subsequent larger requests.
• Framing Effect - Discover how the way information is presented, rather than its objective content, profoundly influences our decisions and perceptions.
• Gambler's Fallacy - The Gambler's Fallacy is a cognitive bias where individuals mistakenly believe that past outcomes of independent random events influence future outcomes.
• Hyperbolic Discounting - Hyperbolic discounting describes our tendency to prefer immediate rewards over larger, delayed rewards, even when the delayed reward is objectively more valuable.
• Loss Aversion - Loss aversion is the psychological bias where the pain of losing something is felt more intensely than the pleasure of gaining an equivalent amount.
• Mental Accounting - Explores how individuals categorize, evaluate, and manage their financial activities by creating distinct mental "accounts," often leading to irrational financial behaviors.
• Mere Ownership Effect - The psychological bias where individuals value an object more simply because they own it, often inflating its perceived worth, attractiveness, and quality.
• Myopic Loss Aversion - The tendency to be overly sensitive to losses when outcomes are evaluated frequently, leading to short-sighted decision-making.
• Placebo Effect - A phenomenon where inert treatments elicit real physiological and psychological improvements due to a patient's belief and expectation, highlighting the profound mind-body connection.
• Planning Fallacy - The planning fallacy is our pervasive tendency to underestimate the time, costs, and risks of future tasks while overestimating their benefits, a bias that affects individuals and organizations alike.
• Priming Effect - The priming effect is a cognitive phenomenon where exposure to one stimulus subtly influences an individual's response to a subsequent stimulus, often without conscious awareness.
• Prospect Theory - A behavioral economic theory describing how people make decisions involving risk and uncertainty, showing that humans systematically deviate from rational choice theory in predictable ways.
• Regression to the Mean - Understand the statistical phenomenon where extreme outcomes tend to move closer to the average upon subsequent measurements, influencing everything from sports performance to investment returns.
• Representativeness Heuristic - A cognitive bias where we judge probabilities based on how closely something matches a mental prototype or stereotype, often neglecting objective data.
• Scarcity Heuristic - A cognitive bias where limited availability increases perceived value, driving urgency and desirability.
• Schema Theory - Schema theory explains how our minds use organized mental frameworks (schemas) to efficiently process, interpret, and remember information, shaping our understanding of the world.
• Self-Efficacy - An individual's belief in their capacity to execute behaviors necessary to produce specific performance outcomes, influencing motivation, behavior, and well-being.
• Self-Perception Theory - A social psychological theory proposing that individuals infer their own attitudes, beliefs, and emotions by observing their own behaviors and the circumstances surrounding them.
• Social Comparison Theory - An exploration of how individuals evaluate their opinions, abilities, and social standing by comparing themselves to others, and the profound impact this has on our psychology and behavior.
• Social Proof - Social proof is a psychological phenomenon where individuals look to the actions and opinions of others to guide their own behavior, especially in uncertain situations.
• St. Petersburg Paradox - A foundational paradox in decision theory that reveals a discrepancy between a gamble's infinite expected monetary value and people's willingness to pay.
• Status Quo Bias - The tendency for individuals to prefer the current state of affairs over change, even when change may be beneficial.
• Sunk Cost Fallacy - Understand the psychological trap of continuing an endeavor due to past investments, even when it's no longer beneficial, and learn how to avoid it.
• Survivorship Bias - An exploration of the cognitive and statistical error where focusing on successes leads to overlooking crucial failures.
• The Backfire Effect - An exploration of the cognitive bias where individuals strengthen their existing beliefs when confronted with contradictory evidence.
• The Barnum Effect - Discover the Barnum Effect, a common cognitive bias where people readily accept vague, general personality descriptions as uniquely tailored to them.
• The IKEA Effect - When Labor Leads to Love - The cognitive bias where we overvalue products we help create, explaining our attachment to DIY projects and customized goods.