5 Questions
What is the main characteristic of the optimistic bias?
Tendency to overestimate positive events
How does overconfidence bias affect decision-making?
It leads to overestimation of accuracy and reliability
What is the planning fallacy associated with?
Overestimating the time, costs, and risks of future actions
Which example best illustrates the planning fallacy?
Someone neglects potential delays in a project timeline
What is the key outcome of the optimistic bias?
Underestimating the likelihood of negative events
Study Notes
Cognitive Biases
- The optimistic bias is characterized by people's tendency to be overly optimistic about the future and underestimate the likelihood of negative events.
Overconfidence Bias
- Overconfidence bias leads to poor decision-making as individuals overestimate their abilities and knowledge, causing them to take unnecessary risks and ignore potential pitfalls.
Planning Fallacy
- The planning fallacy is a cognitive bias that refers to the tendency to underestimate the time, resources, and effort required to complete a task.
- The planning fallacy is often associated with overly optimistic predictions about the timeline and outcome of a project.
Example of Planning Fallacy
- For instance, a student might think they can complete a complex assignment in a few hours, but in reality, it takes several days to complete, illustrating the planning fallacy.
Outcome of Optimistic Bias
- The key outcome of the optimistic bias is that individuals tend to underestimate the likelihood and consequences of negative events, leading to poor planning and decision-making.
Test your knowledge of cognitive and psychological biases with explanations and examples for biases like optimistic bias. Explore how biases can influence judgment and decision making.
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