Search results
Results from the WOW.Com Content Network
Overconfidence effect. The overconfidence effect is a well-established bias in which a person's subjective confidence in their judgments is reliably greater than the objective accuracy of those judgments, especially when confidence is relatively high. [1][2] Overconfidence is one example of a miscalibration of subjective probabilities.
Prospect theory. Daniel Kahneman, who won the 2002 Nobel Memorial Prize in Economics for his work developing prospect theory. Prospect theory is a theory of behavioral economics, judgment and decision making that was developed by Daniel Kahneman and Amos Tversky in 1979. [1] The theory was cited in the decision to award Kahneman the 2002 Nobel ...
A loss of $0.05 is perceived as having a greater utility loss than the utility increase of a comparable gain. In cognitive science and behavioral economics, loss aversion refers to a cognitive bias in which the same situation is perceived as worse if it is framed as a loss, rather than a gain. [1][2] It should not be confused with risk aversion ...
Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory. [1][2] Behavioral economics is primarily concerned with the bounds of rationality of economic ...
Richard H. Thaler (/ ˈθeɪlər /; [ 1 ] born September 12, 1945) is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association. [ 2 ]
The first question addresses common investing errors, the second shows how to try to find bettable patterns which others may misinterpret, and the third deals with behavioral finance, pointing out cognitive errors such as overconfidence and confirmation bias.
You may find overconfidence in others or yourself to be a trait that's harmless, perhaps charming, or even annoying. You likely find it more compelling in an adviser than prudent caution. But that ...
Appearance. hide. For common errors in logic, see List of fallacies. Cognitive biases are systematic patterns of deviation from norm and/or rationality in judgment. They are often studied in psychology, sociology and behavioral economics. [ 1 ] Although the reality of most of these biases is confirmed by reproducible research, [ 2 ][ 3 ] there ...