Availability Bias in Investing

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Match the cognitive biases with their descriptions:

Narrow Range of Experience = Taking personal credit for successes while blaming negative outcomes on external factors Resonance = Information or experience that affects one's belief, desire, and decision making Self-Attribution Bias = Using too narrow a frame of reference based on one's experience when making an estimate Availability Bias = A piece of information or event that strikes a chord with an individual's own beliefs and desires

Match the biases with their potential consequences:

Narrow Range of Experience = Missing out on the potential benefits of diversifying one's portfolio Resonance = Overweighting the importance of information when making decisions Self-Attribution Bias = Overconfidence in one's abilities due to taking personal credit for successes Availability Bias = Making decisions based on vivid or memorable information rather than objective analysis

Match the biases with the categories of Availability Bias:

Selective Availability = Narrow Range of Experience Vividness Availability = Resonance Confirmation Availability = Self-Attribution Bias Hindsight Availability = Not applicable to the above biases

Match the biases with their roots:

Narrow Range of Experience = Limited experience and knowledge Resonance = Emotional connection with information or events Self-Attribution Bias = Human tendency to seek recognition and praise Availability Bias = Cognitive laziness and reliance on vivid information Signup and view all the answers

Match the biases with their implications for investment decisions:

Narrow Range of Experience = Over-investment in familiar assets Resonance = Over-caution in investment decisions Self-Attribution Bias = Overconfidence in investment decisions Availability Bias = Over-reliance on recent or vivid market information Signup and view all the answers

Match the biases with their potential remedies:

Narrow Range of Experience = Seeking diverse perspectives and education Resonance = Taking a step back to assess emotions and objective information Self-Attribution Bias = Recognizing and acknowledging external factors that contribute to success Availability Bias = Using objective data and analysis to inform decisions Signup and view all the answers

Match the biases with their relationships with personal beliefs:

Narrow Range of Experience = Unrelated to personal beliefs Resonance = Strongly influenced by personal beliefs and desires Self-Attribution Bias = Influenced by personal need for recognition and praise Availability Bias = Influenced by personal experiences and emotions Signup and view all the answers

Match the biases with their potential consequences for portfolio management:

Narrow Range of Experience = Lack of diversification and potential losses Resonance = Emotional decision making and potential losses Self-Attribution Bias = Overconfidence in investment decisions and potential losses Availability Bias = Suboptimal investment decisions and potential losses Signup and view all the answers

Match the biases with their underlying psychological drivers:

Narrow Range of Experience = Cognitive laziness Resonance = Emotional connection and desire for validation Self-Attribution Bias = Need for recognition and self-enhancement Availability Bias = Cognitive shortcut and reliance on vivid information Signup and view all the answers

Match the biases with their potential effects on decision-making:

Narrow Range of Experience = Limited consideration of options Resonance = Emotional influence on decision-making Self-Attribution Bias = Biased attribution of success and failure Availability Bias = Overemphasis on vivid or memorable information Signup and view all the answers