Anchor Bias is a cognitive bias that causes us to make decisions based on the first piece of information we encounter, rather than considering all available evidence and making an informed decision. Anchoring Bias Anchoring bias is a term used in psychology to describe the human tendency to rely too heavily on one piece of… Continue reading Why anchoring bias is so tricky | All you need to know
Category: Behavioral Economics
Pygmalion effect in business and real life
The Pygmalion effect, named after the Greek myth of Pygmalion, who carved an ivory statue of a woman and then fell in love with his creation, is the phenomenon in which people develop high expectations for others and thus need less effort to make them succeed. It can often happen when someone with power or… Continue reading Pygmalion effect in business and real life
52-Week anchoring | Effects and solutions you need to know
An anchoring refers to a cognitive bias that occurs when the first piece of information that people have been exposed to influences their judgment. An anchoring bias occurs when people use an initial piece of information (the anchor) to make subsequent estimates. For example, a 52-week anchoring bias occurs when people anchor their current estimate… Continue reading 52-Week anchoring | Effects and solutions you need to know
Nash Equilibrium Examples: The Best Way to Understand It
Nash equilibrium is a term used in game theory to describe a situation in which two or more players may want to reach an agreement but cannot because they have different incentives. It studies the behavior of games such as prisoner’s dilemma, Tit-For-Tat, and cooperative games. Nash equilibrium definition Nash equilibrium is a mathematical concept… Continue reading Nash Equilibrium Examples: The Best Way to Understand It
Asset-rich vs cash-poor | How to balance properly?
Managing finances for the personal, family, and business life is not as easy as 123. There come complexities and dilemmas at times. Striking at a balance may not be comfortable readily. So, it is wise to consider the asset-rich vs. cash-poor or house-poor scenario and plan in advance. Asset-rich vs cash-poor Asset-rich, cash-poor refers to… Continue reading Asset-rich vs cash-poor | How to balance properly?
Boiling frog syndrome | Timely decisions save money and life
The boiling frog syndrome plays a very decisive role not only in biology and natural ecosystem but also in the business, finance and investment. The final investors are human beings and thus the behavioral finance, specially the biases are getting important decision-making factors in the present investment world. The boiling frog syndrome The boiling frog… Continue reading Boiling frog syndrome | Timely decisions save money and life