BIA Concepts Exam 2 Review

Overconfidence

unjustifiable trust in our own abilities

Overprecision

overestimating the accuracy of our knowledge or the precision of our beliefs

Overestimation

believing you have greater skill across a number of domains than you actually have

Overplacement

believing you perform better than others

Availability heuristic

remembering inforamtion based on ease of recall and retrievability

Representativeness heuristic

estimate the probability of an object, person, or event by comparing it to existing stereotype

Working memory

a cognitive system of limited capacity that temporarily holds and actively manipulates information in the mind

Ease of Recall

a bias of availability heuristic that helps us remember based on vividness or recency of an event

Retrievability

a bias of availability heuristic that relies on memory structures to easily retrieve information

Insensitivity to Base Rates

bias of representativeness heuristic that incorrectly estimates the probability of an event based on a memorable example

Insensitivity to Sample Size

bias of representativeness heuristic that incorrectly estimates the probability of an event without accounting for how large or small that sample is

Misconception of Chance

bias of representativeness heuristic that incorrectly estimates probabilities without understanding how they work (ex. more likely to win after playing for a while)

Regression to the Mean

bias of representativeness heuristic that incorrectly assumes that outliers are lasting behavior when event will return to normal probability

Conjunction Fallacy

bias of representativeness heuristic that incorrectly states one event is more likely to happen with another event

Confirmation heuristic

tendency of the human mind to search for, interpret, favor, and recall information that confirms pre-existing beliefs or hypotheses

Confirmation trap

bias of confirmation heuristic that accepts information which confirms previous information or beliefs and ignores contrary evidence

Anchoring bias

bias of confirmation heuristic where people rely too heavily on the first piece of information they encounter when making decisions

Conjunctive Events

bias of confirmation heuristic that overestimates the probability of two or more individual events happening together at the same time or in a specific sequence (P(A x B) decreases more it happens, not increases)

Disjunctive Events

bias of confirmation heuristic that underestimates the probability that at least one of the individual events occurs

Hindsight bias

bias of confirmation heuristic that overestimates previous information or beliefs (prior knowledge) and assumes everyone had the knowledge you did on the topic, inability to sympathize

Bounded Awareness

a cognitive bias where people fail to notice, seek out, or use relevant, easily accessible information while making decisions

Inattentional Blindness

failure to notice a fully visible, unexpected object or event because your attention is intensely focused on another task

Change Blindness

failure to notice large, obvious alterations in a visual scene

Focalism

Overestimation of importance of certain information and underestimation of importance of all other information

Bounded Awareness In Groups

group members systematically fail to see, seek, use, or share important, easily accessible information while making collective decisions (groupthink, group neglect)

Bounded Awareness In Strategic Settings

bias where fairness, emotions, and social norms influence decisions beyond pure

rationality

Bounded Awareness In Auctions

Failure to see the full picture, winning bidder usually overpays, continue bidding past planned limit, focus on competition over value