All Biases
Browse, search, and filter all documented behavioural biases.
Use the search bar above or the filter panel on the right to narrow down biases by category or keyword.
| Bias | Description | Category |
|---|---|---|
| Affect Heuristic | It’s when an easy, emotional assessment (“affect”) replaces a more complex assessment (“target attribute”) that requires more thought, such as e.g. a calculation. This is… | heuristics |
| Anchoring and Adjustment | This is a judgment bias where an initial value (the “anchor”) influences subsequent estimates or decisions. While we might adjust from the anchor, the adjustment is usually… | heuristics, choices |
| Attention Bias | Attention bias occurs when we focus on the most visually or emotionally prominent features of a decision, rather than the most critical ones. Because our cognitive resources… | heuristics, availability |
| Availability Cascades | The more a story is repeated, the more important it appears, in a self-reinforcing process. This can be illustrated as follows: | social, availability, information-cascades |
| Availability Heuristic | It’s when individuals estimate the probability of an event based on the ease with which examples come to mind. Consequently, more salient or recent information can… | |
| Aversion to Ambiguity | This bias describes a preference for choices with known probabilities over those with unknown probabilities, regardless of the expected value of each. | heuristics, familiarity |
| Aversion to a Sure Loss | It’s the instinct to avoid to accept a definitive loss when there is still a chance of recovering it. This can lead to taking a riskier chance that might lead to an even… | prospect-theory, diminishing-sensitivity |
| Base Rate Neglect | It’s when we overweigh specific information we have at hand (“representativeness”) over prior probabilities in the broader population, when making judgements. | heuristics, representativeness |
| Causality and Attribution | When trying to explain the causes of events, we make errors resulting from the prominence of available information, stereotypes etc. | heuristics, representativeness |
| Choice Bracketing | Choice bracketing refers to how we group individual choices into broader or narrower evaluation sets. When bracketing narrowly, we seek the maximum immediate satisfaction;… | choices, mental-accounting |
| Choices & Framing Biases | This group of biases is generally related to framing and evaluation; the way an option is presented can change our decision. | |
| Communal Reinforcement & Groupthink | Communal Reinforcement refers to mutual reinforcement through exchange of information (social learning) and it often goes along with confirmation bias. Groupthink, on the… | social, conformity |
| Confirmation Bias | This bias refers to registering or recalling information that supports one’s pre-existing views while ignoring contradictory evidence. | heuristics, overconfidence |
| Conjunction Fallacy | The Conjunction fallacy occurs when one believes that the probability of the conjunction of two events (i.e. occurring together) is greater than that of one of its… | heuristics, representativeness |
| Conservatism | Conservatism bias refers to the slow updating of preferences in the face of new information. Combined with Loss Aversion, it leads to slow adaptation to good news but fast… | prospect-theory |
| Context Dependence | Context dependence describes how the same option can be more or less attractive depending on what else is in the choice set. It can further be distinguished into: | choices, framing |
| Diminishing Sensitivity | According to the Diminishing Sensitivity bias, smaller changes are perceived as more important close to the reference level than changes further away from it. | pprospect-theory |
| Excessive Optimism | This bias describes the tendency to believe that good outcomes of events outside our control are more likely than bad outcomes, despite what objective probabilities might… | heuristics, overconfidence |
| Extrapolation Bias | Extrapolation bias is the tendency to believe that recent trends will continue into the future, without accounting for the reasons that might cause them to reverse, such as… | heuristics, representativeness |
| Fairness and Justice | Financial decisions can be affected by considerations of fairness and loyalty, resulting in either abstaining from or favoring particular choices. | social |
| Familiarity | The familiarity bias is related to the fact that people tend to fear change and the unknown. Repeated exposure to a brand, option, or idea creates a sense of comfort and… | heuristics |
| Favourite-Longshot Bias | It’s when we over-bet on unlike winners and under-bet on favorites. This is why the odds of the favorites in the betting industry tend to be higher than their true… | prospect-theory, diminishing-sensitivity |
| Fluency Heuristic | The fluency heuristic is a variation of the Recognition Heuristic: when both options are recognised, the one retrieved from memory more easily (faster, more vividly) is… | heuristics, familiarity |
| Frame Dependence | It’s when our choices change depending on the framing of a problem; in other words, options are not always evaluated in absolute terms but relative to the way they are… | choices |
| Gambler’s Fallacy | The gambler’s fallacy is the mistaken belief that, after a run of one outcome of events, there’s bound to be a “reversal” or “balancing out”, and therefore the opposite… | heuristics, representativeness |
| Greed and Fear | Fear in financial decisions may result from the unknown, from change, or from the possibility of collapse. When combined with greed, it can lead to increased risk-taking. In… | social |
| Hedonic Editing | It’s when we narrate events in a way that makes us feel happier. We therefore tend to combine losses with larger gains (to reduce pain) or separate gains into smaller parts… | choices, mental-accounting |
| Heuristics & Judgement Biases | Heuristics are mental “rules of thumb” that help us make quick decisions under uncertainty. While often useful, they can lead to wrong decisions when applied in the wrong… | |
| Hindsight Bias | Hindsight bias is when we believe that we predicted the outcome of an event, after it has occured, even when we didn’t. The reason this happens is that, after an event… | heuristics, availability |
| Hot Hand Fallacy | The hot hand fallacy is the belief that long streaks are bound to continue, failing to account for systematic reasons or the statistical independence of events. It’s similar… | heuristics, representativeness |
| Hyperbolic Discounting & Present Bias | According to this bias, value is not discounted at a fixed rate over time, but closer rewards are valued much higher than distant ones, at a diminishing rate. In other… | prospect-theory, choices, preference-reversals |
| Illusion of Control | Illusion of control refers to believing that random events are subject to our control (see also the concept of Magical Thinking in psychology). | heuristics, overconfidence |
| Illusion of Validity | To think your judgement is valid, even when the evidence you have at hand is weak or unreliable. | heuristics, representativeness |
| Information Cascades | This bias can be summed up as “maybe everyone else knows something I don’t” and it occurs when individuals follow the actions of others while ignoring their own information. | social |
| Law of Small Numbers | It’s the mistake to believe that a small sample accurately resembles the parent population. In reality, small samples have a small confidence interval and will eventually… | heuristics, representativeness |
| Loss Aversion | People suffer more from a loss than they enjoy a gain of the same magnitude. This asymmetry is called loss aversion, is central to the Prospect Theory and it may explain why… | |
| Mental Accounting | This category of biases refers to the different criteria and attitudes that individuals use to evaluate financial activities and objects, depending on their source, purpose… | |
| Myopic Loss Aversion | Myopic loss aversion involves evaluating gains or losses over very short timeframes, while being more sensitive to the latter (in line with Loss Aversion). | prospect-theory, loss-aversion |
| Narrow Framing | It’s the tendency to evaluate events in isolation, rather than considering the whole picture. | choices, framing |
| Obedience to Authority | Obedience to authority in a financial context means following expert advice even when the data or our views say otherwise. We therefore trust the expert’s status as a… | social, conformity |
| Overconfidence | Overconfidence is our tendency to overestimate our own skills and it might occur when (a) estimating our own performance (overestimation), (b) our own performance relative… | heuristics, overconfidence |
| Preference Reversals | Preferences are considered rational if they remain consistent over time. In reality, however, we do change our minds, have problems committing to decisions and are biased… | |
| Prospect Theory Biases | Kahneman & Tversky’s Prospect Theory overturned classical expected utility theory by showing that people evaluate outcomes relative to a reference point, and feel losses… | |
| Recognition Heuristic | This bias involves assigning a higher value to an object we recognize. The heuristic is considered rational when the recognition criterion has some validity. | heuristics, familiarity |
| Reference Dependence | In reference dependence, we don’t evaluate final states in isolation, but changes relative to a reference point. In this context, when gains occur we think of the… | prospect-theory |
| Repeated Gambles | Repeated gambles refer to the failure to account for how individual decisions aggregate over time as cumulative sums. For example, each choice may seem trivial in isolation… | choices, framing |
| Representativeness Heuristic | The Representativeness bias takes place when we assess the likelihood of an event by how well it matches (represents) a belief (stereotype) in our mind, rather than by… | |
| Self-Attribution Bias | When one attributes successful outcomes to their personal abilities but unsuccessful ones to external factors or “sabotage”. This leads to overconfidence, as one might expect! | heuristics, overconfidence |
| Self-Control and Commitment | It’s when we are unable to recognize that our present and future selves have different needs. | prospect-theory, choices, preference-reversals |
| Social Contagion & Conformity | As a society, we have a tendency toward conformity that is so strong it can lead intelligent, well-meaning people to be willing to call white black. | social, conformity |
| Social Factors | Cultural and social factors also impact our behavior, as we are affected by social conformity, authority, and information cascades. These biases explain market bubbles… | |
| Status, Envying and Social Comparison | This bias relates to buying products out of jealousy, to boost self-esteem, resulting from the prejudice comparisons create. | social |
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