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The post Why Smart People Make Bad Decisions—And Why It’s Hard to Learn From Our Mistakes appeared first on Worth. The more we do anything, we alter our brains to become better at it.
Has been shown to affect various important economic decisions, for example, a choice of car insurance or electrical service. [32] Overconfidence effect: Tendency to overly trust one's own capability to make correct decisions. People tended to overrate their abilities and skills as decision makers. [33] See also the Dunning–Kruger effect.
Once an action has been taken, the ways in which we evaluate the effectiveness of what we did may be biased. [3] It is believed this may influence our future decision-making. These biases may be stored as memories, which are attributions that we make about our mental experiences based on their subjective qualities, our prior knowledge and ...
Social psychologist Scott Plous wrote, "No problem in judgment and decision making is more prevalent and more potentially catastrophic than overconfidence." [29] It has been blamed for lawsuits, strikes, wars, poor corporate acquisitions, [30] [31] and stock market bubbles and crashes. Strikes, lawsuits, and wars could arise from overplacement.
To understand all the consequences of an important choice takes time and attention -- even if both are hard to come by. I've written before about the importance of sleep. Tired brains lose their ...
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After experiencing a bad outcome with a decision problem, the tendency to avoid the choice previously made when faced with the same decision problem again, even though the choice was optimal. Also known as "once bitten, twice shy" or "hot stove effect". [106] Mere exposure effect or familiarity principle (in social psychology)
It is an attempt to find reasons for behaviors, especially one's own. [2] Rationalizations are used to defend against feelings of guilt, maintain self-respect, and protect oneself from criticism. Rationalization happens in two steps: A decision, action, judgement is made for a given reason, or no (known) reason at all.