Category: Cognitive Biases
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Cognitive Biases: Loss Aversion
This is the final cognitive bias we will look at, and it is one of the most common with some of the widest impacts – loss aversion is present in almost everyone, and can influence anything from day-to-day decisions to major life choices. Another cognitive bias frequent in humans that the ‘rational economic man’ model…
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Cognitive Biases: Myopia (Short-Sightedness)
For our second cognitive bias, we will look at myopia. As the name suggests, it occurs when people don’t look ahead and end up in a situation that could have been easily avoided with some foresight. Another problem humans face when making important decisions is myopic behaviour or acting in a short-sighted manner. When you…
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Cognitive Biases: Weakness at Computation
Computational weakness is one of the most common causes of irrational decisions, and it is exactly as it sounds – humans are terrible mathematicians, especially under pressure. Here, we will look at its causes, effects and examples of where it can impact decision-making. Weakness at computation is one of the main contributors to irrational decision…
Economics 101 