The confirmation bias occurs when individuals

Interpret new evidence as support for their pre-existing beliefs.

The halo effect occurs when -

An initial positive impression of a person influences overall judgment.

What does status quo bias refer to?

The tendency to prefer things to remain as they are rather than change.

The sunk cost fallacy leads people to -

Continue investing in a failing project due to previous investments.

A mental shortcut used to simplify decision-making

What is the main consequence of the overconfidence bias?

People overestimate their abilities, or accuracy of their judgments.

Which of the following best describes the anchoring bias?

Making a decision based on the first piece of information encountered.

Which of the following is an example of the illusion of control?

A gambler believing they can influence the outcome of a roulette spin.

Which of the following is an example of the availability heuristic?

Judging the likelihood of an event based on recent memories.

What is cognitive dissonance?

A feeling of discomfort caused by holding conflicting beliefs or behaviours

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Behavioural Bias Evaluation

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Questions 16

Answers

1
The representativeness heuristic causes people to judge event by similarity to stereotypes rather than statistics.
True
False
2
Herd behaviour is an example of a heuristic that always leads to better decision-making.
False
True
3
The confirmation bias occurs when individuals
Actively seek out information that challenges their beliefs.
Avoid making decisions due to excessive information
Interpret new evidence as support for their pre-existing beliefs.
Always make rational economic decisions
4
People are more likely to neglect probability when the outcomes are emotionally charged.
False
True
5
The mere exposure effect is stronger when the exposure is conscious and deliberate.
False
True
6
The halo effect occurs when -
Decisions are based purely on logical reasoning
An initial positive impression of a person influences overall judgment.
Individuals refuse to update their beliefs despite new evidence.
People make judgments based on a single negative characteristic.
7
What does status quo bias refer to?
The tendency to prefer things to remain as they are rather than change.
The preference for new information over past experiences.
The habit of making impulsive decisions.
The tendency to follow the majority opinion
8
The sunk cost fallacy leads people to -
Consider all available information before making a decision.
Focus on future potential rather than past investments.
Continue investing in a failing project due to previous investments.
Base decisio.ns solely on rational economic principles
9
What is a heuristic?
A systematic method of analysing data
A logical process that ensures optimal decision-making
A mathematical model used in economics
A mental shortcut used to simplify decision-making
10
What is the main consequence of the overconfidence bias?
People are more likely to rely on others for decision-making.
People underestimate their ability to make decisions.
People always take the safest possible option.
People overestimate their abilities, or accuracy of their judgments.
11
Which of the following best describes the anchoring bias?
Making a decision based on the first piece of information encountered.
Being more affected by negative information than positive information.
Ignoring relevant information in favor of personal beliefs.
Believing that past events influence future probabilities.
12
Which of the following is an example of the illusion of control?
Ignoring the low probability of a rare event.
Overestimating the difference between two similar products.
A gambler believing they can influence the outcome of a roulette spin.
A person preferring a brand they’ve seen many times.
13
Which of the following is an example of the availability heuristic?
Judging the likelihood of an event based on recent memories.
Ignoring information that contradicts your beliefs.
Assuming someone is intelligent because they wear glasses.
Preferring to keep things the way they are rather than making a change.
14
What is cognitive dissonance?
A feeling of discomfort caused by holding conflicting beliefs or behaviours
A preference for familiar things due to repeated exposure.
A tendency to overestimate the likelihood of rare events.
A bias where people believe they have more control over outcomes.
15
Impact bias is more likely to occur for negative events than positive ones.
False
True
16
Distinction bias is more likely to occur when options are evaluated separately rather than side by side.
True
False

Behavioural Bias Evaluation Flashcards | StudBud