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Cognitive Biases are a collection of faulty and illogical ways of thinking which are hardwired in the brain, most of which we aren’t aware of.
The idea of cognitive biases was invented in the 1970s by two social scientists Amos Tversky and Daniel Kahneman, with Kahneman winning the 2002 Nobel Prize in Economics for the same.
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This is one of the most common and dangerous ones, and is related to our beliefs. It leads us to ‘confirm’ what we already know, believe or suspect when any new piece of data comes in the light. If there is an alternate or conflicting piece of evidence, we tend to sideline, ignor...
It's our tendency to place importance on the first figure that we hear or see and tends to greatly affect our decisions, estimates or predictions.
Negotiators use this tactic and start with an extremely high or low number, anchoring the subsequent deal in their favour.
It makes us certain without a doubt that if the flipped coin lands a heads up five times consecutively, it will land as tails up the sixth time. The real odds still stand at 50-50 for each flip.
It's a tendency to heavily weigh the moment which is closer to the present, as compared to something in the near or distant future.
Example: If you are offered a choice of $150 right now or $180 after 30 days, you would be more inclined to choose the money you are offe...
Sunk-cost thinking makes us stick with a bad decision due the investments already made.
Silence is the way to avoid many problems & Smile is the way to solve many problems.
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It is a field of study bringing together knowledge from psychology and economics to reveal how real people behave in the real world.
Confirmation bias is a common tendency to self-promote and validate our own beliefs. Most controversial issues have people who are for or against the given topic, and tend to look at points that support their existing belief patterns.
Daniel Kahneman, a Nobel prize winning...
The economic theory of expected utility maximization says that people will act out of rational self-interest. But psychologist Daniel Kahneman showed that it is incorrect.
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