1. What is the Availability Bias? How does this bias cause problems in financial decision making?...

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Psychology

1. What is the Availability Bias? How does this bias causeproblems in financial decision making? How does this basis causeproblems for our lives in general? Why do we do have this bias?

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The availability heuristic is a mental shortcut that relies on immediate examples that come to a given persons mind when evaluating a specific topic concept method or decision The availability heuristic operates on the notion that if something can be recalled it must be important or at least more important than alternative solutions which are not as readily recalled Subsequently under the availability heuristic people tend to heavily weigh their judgments toward more recent information making new opinions biased toward that latest news The availability of consequences associated with an action is positively related to perceptions of the magnitude of the consequences of that action In other words the easier it is to recall the consequences of something the greater those consequences are often perceived to be Most notably people See Answer

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