Glossary of Behavioural Biases

Glossary of Behavioural Biases Actor-Observer Bias Overemphasizing the infuence of personality rather than the situation in explaining the behaviour of others Ambiguity Effect Avoiding options for which missing information makes the probability seem unknown Anchoring Te decision-making process relies too heavily on the frst piece of information acquired Anthropic Bias Biased evidence as a result of observation selection efects Anthropomorphism Characterizing animals, objects and abstract concepts as possessing human-like traits, emotions and intentions Attentional Bias Recurring thoughts afecting perception Authority Bias Attributing greater accuracy to the opinion of an authority fgure Automation Bias Depending excessively on automated systems Availability Cascade Collective beliefs becoming more plausible by virtue of repetition Availability Heuristic Overestimating the likelihood of events with greater availability in memory Backfre Effect Reaction to disconfrming evidence by strengthening prior pre- vious beliefs Bandwagon Effect Doing or believing things that others do or believe Barnum Effect See Forer Efect © Te Editor(s) (if applicable) and Te Author(s) 2017 163 I. A. Moosa and V. Ramiah, Te Financial Consequences of Behavioural Biases, https://doi.org/10.1007/978-3-319-69389-7 164 Glossary of Behavioural Biases Base Rate Fallacy Ignoring general information, choosing instead to focus on specifc information Base Rate Neglect See Base Rate Fallacy Belief Bias Te logical strength of an argument is biased by the believability of the conclusion Belief Revision See Conservatism Beneffectance Perceiving oneself as responsible for desirable, but not undesirable, outcomes Ben-Franklin Effect Doing someone a favour is more likely to trigger another favour than receiving a favour from that person Berkson’s Paradox Misinterpretation of statistical experiments involving condi- tional probabilities Better-than-Average Effect See Illusory Superiority Bias Blind Spot Seeing oneself as less biased than other people and identifying more biases in others Bikeshedding See Triviality Bizarreness Effect Bizarre material is better remembered than common material Cheerleader Effect Appearing more attractive in a group than in isolation Childhood Amnesia Te retention of few memories from before the age of four Choice-Supportive Bias Believing that one’s choices are more informed than they were when they were made Clustering Illusion Overestimating the importance of small runs, streaks or clusters in large samples of random data (seeing patterns when there are no patterns) Confabulation Remembering something that never actually happened Confrmation Bias Focusing on information that confrms prior beliefs Congruence Bias Testing hypotheses directly without considering possible alternatives Conjunction Fallacy Assuming that specifc conditions are more probable than general ones Conservatism Reluctance to revise prior beliefs in response to the availability of new information Consistency Bias Incorrectly remembering past attitudes and behaviour as resembling current ones Context Effect Out-of-context memories are more difcult to retrieve than in- context memories Continued Infuence Effect Believing previously learned misinformation even after it has been corrected Glossary of Behavioural Biases 165 Contrast Effect Enhancing or reducing a certain perception’s stimuli when compared with a contrasting object Courtesy Bias Presenting an opinion that is more socially valid or acceptable than one’s true opinion Cross-Race Effect People of one race fnding it difcult to identify members of another race Cryptomnesia A memory is mistaken for imagination Current Moment Bias See Hyperbolic Discounting Curse of Knowledge Better-informed people fnd it difcult to think about problems from the perspective of less-informed people Declinism Believing in the tendency towards decline by thinking favourably of the past Decoy Effect Someone who is indiferent between options A and B prefers B when option C is presented Defensive Attribution Assigning more blame to a harm-doer as the outcome becomes more severe Déformation Professionnelle Looking at things according to the conventions of one’s own profession without considering any broader point of view Denomination Effect Spending more money of small than large denominations Disposition Effect Selling assets that have appreciated in value but not those that have declined in value (selling winners and keeping losers) Distinction Bias Regarding two options as more dissimilar when they are evalu- ated simultaneously rather than separately Dunning-Kruger Effect Unskilled individuals overestimate while experts under- estimate their abilities Duration Neglect Disregarding the duration of an episode when its value is determined Egocentric Bias Claiming more responsibility for the results of a joint action or recalling the past in a self-serving manner Empathy Gap Underestimating the infuence or strength of feelings in oneself or others Endowment Effect Demanding much more to give up an item than paying to acquire the same item Exaggerated Expectation Real-world evidence turns out to be less extreme than expected Expectation Bias See Experimenter’s Bias Experimenter’s Bias Believing and reporting results that are consistent with the expected outcome of an experiment while disbelieving inconsistent results 166 Glossary of Behavioural Biases Extreme Aversion Avoiding extremes options Extrinsic Incentives Bias Viewing others as having situational extrinsic motivations and dispositional intrinsic motivations for oneself Fading Effect Bias Te emotion associated with unpleasant memories fades more quickly than those associated with pleasant events False-Consensus Effect Overestimating the degree to which others agree with own views False Memory Imagination is mistaken for a memory Focalism See Anchoring Focusing Effect Placing too much importance on one aspect of an event Forer Effect Considering as highly accurate the descriptions of own personality that are in fact vague and general enough to apply to a wide range of people Framing Effect Te conclusions drawn from the same information depend on how it is presented Frequency Illusion A word, a name or another thing that has recently come to one’s attention suddenly seems to appear with improbable frequency shortly afterwards Functional Fixedness Using an object only in the way it is traditionally used Gambler’s Fallacy Tinking that future probabilities are altered by past events when events are independent Generation Effect Self-generated information is remembered best Google Effect Forgetting information that can be found easily online Group Attribution Error Believing that the characteristics of a group member are refective of the group as a whole Groupthink See Bandwagon Efect Halo Effect A person’s positive or negative traits spilling over from one personality area to another in others’ perceptions of them Hard–Easy Effect Based on a specifc level of task difculty, the confdence in judgments is too conservative and not extreme enough Herd Behaviour See Bandwagon Efect Hindsight Bias Seeing past events as being predictable at the time of occurrence Hostile Attribution Bias Viewing the behaviour of others as hostile when it is not Hostile Media Effect Perceiving news coverage as biased against own position Hot-Hand Fallacy Te belief that a person who has experienced success with a random event has a greater chance of further success in additional attempts Hot-Hand Phenomenon See Hot-Hand Fallacy Glossary of Behavioural Biases 167 Humour Effect Humorous items are more easily remembered than non-humorous ones Hyperbolic Discounting Making choices that are inconsistent over time—that is, making a choice today and subsequently thinking that it should not have been made Identifable Victim Effect Responding more strongly to one person at risk than to a large group of people at risk IKEA Effect Placing a disproportionately high value on self-assembled objects, regardless of the quality of the end result Illusion of Asymmetric Insight Te perception that one’s knowledge of their peers is greater than their peers’ knowledge of them Illusion of Control Overestimating one’s degree of control over external events Illusion of External Agency Self-generated preferences are considered to be caused by insightful, efective and benevolent agents Illusion of Transparency People overestimating others’ ability to know them and their ability to know others Illusion of Truth Effect Statements that have been heard previously are more likely to be identifed as being true Illusion of Validity Believing that further information enhances predictability even when it does not Illusory Correlation Perceiving a relationship between two unrelated events or believing in spurious correlation Illusory Superiority Overestimating own desirable qualities and underestimating undesirable qualities Illusory Truth Effect A statement is true if it is easy to process or if it has been repeated, irrespective of its actual veracity Information Bias Seeking information even when it cannot afect action Ingroup Bias Giving preferential treatment to those perceived to be members of the same group Insensitivity to Sample Size Under-estimating variation in small samples Irrational Escalation Justifying increased investment in a wrong decision, based on the cumulative prior investment Intentionality Bias Believing that people act without our best interests in mind, intentionally trying to harm us Just-World Hypothesis

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