IB Economics HL

Cognitive Biases types for Behavioral economics (A Level or IB)

Status Quo or Default Bias

Humans are resistant to change so, for laziness, they tend to make decisions which won’t alter their daily routine, habits

Hyperbolic Discounting Bias

Humans tend to prioritize smaller short term rewards over a greater long term reward;

Anchoring Bias

When we are given a value, we use it as a point of reference when asked to quantify something else;

Framing Bias

Frame refers to the way a choice is described and presented to us; a different way to express the same concept can change our response to the question

Social Conformity Bias

When humans tend to make decisions based on societal expectations/in conformity with society; 

Loss Aversion Bias

We emphasize losses more than potential gains;

Availability Bias

The availability of new information, over-influencing humans decision making;