Category: Behavioral Economics

The False Mirror | René Magritte | 1928

Actor-Observer Bias

You  are  at  the  casino  watching  a  game  of  Black  Jack, when a player who has a hand of sixteen asks for another card.   You quip to yourself “What an idiot!   He should have...

The False Consensus Effect

The False Consensus Effect

The false consensus effect demonstrates an inability of individuals to process information rationally, it suggests that conventional economic analysis of strategic behavior, which assumes unbiased expectation formation, is deficient. A Simple Theory of the...

The Ostrich Effect

The Ostrich Effect

  “We know – intellectually – that confronting an issue is the only way to resolve it. But any resolution will disrupt the status quo. Given the choice between conflict and change on the...