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...
Category: Behavioral Economics
Survivorship bias: dead men don’t tall tales
Diogenes was asked concerning paintings of those who had escaped shipwreck: “Look, you who think the gods have no care of human things, what do you say to so many persons preserved from death...
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
“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...
