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Industrial Strategy 2022

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Question:

What is a judgement bias and what is some examples of these?

Author: Hjalmer Pedersen



Answer:

A judgement bias is when our judgement is biased towards certain things. 1. Bandwagon effect - we do what the rest do 2. Anchoring bias - We are over-reliant on the first piece of information we hear. Like when negotiation salary, the first number is the anchor, and the final salary will be close around this amount. 3. Confirmation bias - We tend to listen only to information that confirms our preconceptions. 4. Availability heuristic - People overestimate the importance of information that is available to them. 5. Recency - The tendency to weigh the latest information more heavily than older data. 6. Outcome bias - Judging a decision based on outcome. Just because you won a lot in Vegas does not mean it was a good decision to gamble the money!


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