Chapter 6 | Availability Bias

Question 1

Availability Bias other term

Answer 1

Availability Heuristic

Question 2

Things on the news
I have all that I need
Things in the world

Answer 2

Availability Bias

Question 3

In psychology it’s the human tendency to rely on information that comes readily to mind when evaluating situations or making decisions

Answer 3

Availability Bias

Question 4

Because of this bias, people believe that the readily available info is more representative of fact than is the case

Answer 4

Availability Bias

Question 5

The availability bias is a rule of thumb, or mental shortcut that allows people to estimate the probability of an outcome based on how prevalent or familiar that outcome appears in their lives.

Answer 5

Availability Bias

Question 6

Tendency to rely on available info

Answer 6

Availability Bias

Question 7

Overestimate or underestimate because of availability of info

Answer 7

Availability Bias

Question 8

Several examples

Answer 8

Running away from fear of white van
Man abducted in gasoline station
Orphan
Things happening in the world, things on the news.
Fear of flying
Memories of past success
Lion Attacks
Pygmy Hippo

Question 9

Categories of availability bias

Answer 9

Retrievability
Categorization
Narrow Range of Experience
Resonance

Question 10

Ideas that are retrieved most easily seem to be the most CREDIBLE, though it’s not necessarily the case

Answer 10

Retrievability

Question 11

Unang naaalala when it comes to investment

Answer 11

Retrievability

Question 12

Also it refers to our tendency to make decisions based on memories that we can recall

Answer 12

Retrievability

Question 13

Other examples

Answer 13

Martial Law, Axie, ABS CBN, Utang

Question 14

Bias due to RETRIEVABILITY instances was developed by ______. When some events are more vivid than others or have occurred recently be recalled memory and thus appear more frequent. Leads to bad decision-making.

Answer 14

Retrievability

Question 15

Attempt to categorize or summon information to that matches certain reference

Answer 15

Categorization

Question 16

The first thing that their brain do is to generate set of search terms that will allow them to efficiently navigate their brain classification structure and locate data they need.

Answer 16

Categorization

Question 17

Example is the pronounce and unsustainable market rise attributed to increase speculation in technology stocks

Answer 17

Tech bubble

Question 18

When a person possess too restrictive frame or reference from which to formulate an OBJECTIVE ESTIMATE

Answer 18

Narrow Range of Experience

Question 19

Investors will choose investments that fit their narrow range of life experiences such us industry they work for, the region they live in, and the people they associate with. For example, investors who work in technology industry may believe that only technology instruments will be profitable. (Example Kodak, Nokia, Kangkong Chips)

Answer 19

Narrow Range of Experience

Question 20

The extent to which certain vis-a-vis given a situation can influence judgement

Answer 20

Resonance

Question 21

Investors will choose investments that resonate with their own personality or that have characteristics

Answer 21

Resonance

Question 22

Implication for Investors

Answer 22

Investors ignore potentially beneficial investments because information to those investments is not readily available information avoiding diligent research.