Cognitive Biases Quiz

Cognitive Biases: A Systematic Pattern of Deviation from Norm or Rationality in Judgment

• Cognitive biases are systematic patterns of deviation from norm or rationality in judgment.
• The study of cognitive biases has practical implications for areas including clinical judgment, entrepreneurship, finance, and management.
• Cognitive biases may lead to perceptual distortion, inaccurate judgment, illogical interpretation, and irrationality.
• Some cognitive biases are adaptive and may lead to more effective actions in a given context.
• A continually evolving list of cognitive biases has been identified over the last six decades of research on human judgment and decision-making in cognitive science, social psychology, and behavioral economics.
• The securities regulation regime largely assumes that all investors act as perfectly rational persons, but actual investors face cognitive limitations from biases, heuristics, and framing effects.
• Cognitive biases can create issues in everyday life, such as eating disorders, body image, and property sale price and value.
• Cognitive biases cannot be compensated for using a wisdom of the crowd technique of averaging answers from several people.
• Debiasing is the reduction of biases in judgment and decision-making through incentives, nudges, and training.
• Cognitive bias modification refers to the process of modifying cognitive biases in healthy people and also refers to a growing area of psychological therapies for anxiety, depression, and addiction called cognitive bias modification therapy (CBMT).
• Cognitive biases have been linked to varying levels of cognitive abilities and functions.
• Critics of cognitive biases include Gerd Gigerenzer, who believes that cognitive biases are not biases, but rules of thumb that can actually help us make accurate decisions in our lives.