Law of small numbers, or hasty generalization, is a cognitive bias and refers to the tendency to draw broad conclusions based on small data.
Tagged: Amos Tversky
Loss aversion can be simply defined as “losses loom larger than corresponding gains.” It refers to the fact that people actually prefer to avoid losses rather than acquiring gains. Simply put, people prefer find it better not to lose $50 than receiving the same $50.
In many situations, people make estimates by starting from an initial value that is adjusted to yield the final answer. That is, different starting points yield different estimates, which are biased toward the initial values. We call this phenomenon the anchoring effect.
Richard Thaler was born in New Jersey in 1945. He attended Case Western Reserve University and received his bachelor degree in economics in 1967. He continued his studies and got a masters in economics from University of Rochester. Thaler also received his PhD in 1974 in economics from the same university.