Biases in Probability and Belief

A financial analyst consistently underestimates the risk involved in new tech startups because he predominantly recalls the few highly successful tech companies, while overlooking the numerous failures. Which bias is he most likely exhibiting?

After a widely publicized plane crash, people overestimate the likelihood of dying in a plane crash and prefer to travel by car, even though statistically, car travel is more dangerous. This is an example of what?

An investor believes that a stock will perform well based on a hunch, subsequently interpreting any positive news as confirmation and downplaying any negative indicators. Which bias is most evident in this scenario?

An project manager consistently delivers projects later than initially estimated, yet continues to confidently predict overly optimistic timelines for future projects. Which bias does this best illustrate?

Following a controversial court case verdict, many people claim they knew the verdict was predictable, despite having expressed uncertainty before it was announced. This is an example of what?

Availability Heuristic

Availability Cascade

Illusory Correlation

Biases in probability and belief affect judgment and decision-making.
The availability heuristic estimates likelihood based on the ease of recall, favoring vivid or emotional examples.
Availability cascade describes how public repetition increases belief in a collective idea.
Hindsight bias is the "I-knew-it-all-along" effect, perceiving past events as predictable after they happen.
Illusory correlation is the inaccurate perception of a relationship between events due to prejudice or selective information processing.
The just-world hypothesis is the belief in a fundamentally just world, leading to rationalization of injustices.
Base rate neglect (or fallacy) is the tendency to focus on specifics while ignoring general statistical information.
Optimism bias is the overestimation of positive outcomes for planned actions.
The ostrich effect involves ignoring obvious negative situations.
The overconfident effect is excessive confidence in one's answers; for example, answers rated "99% certain" can be wrong 40% of the time.
Subjective validation is the perception that something is true based on personal beliefs, assigning connections between coincidences.
The well-travelled road effect involves underestimating travel time on familiar routes and overestimating it on unfamiliar ones.

Cognitive biases impact judgment and decision-making. The availability heuristic relies on easily recalled examples. Other biases include hindsight bias, illusory correlation, just-world hypothesis, base rate neglect, optimism bias, the ostrich effect and the overconfident effect.