Literature on Focusing Effect
Outcome Bias – Not All Outcomes are Created Equal
Evaluating the outcomes of our actions makes sense. However, there is a cognitive bias where we place too much weight on the outcome and aren’t critical enough of the process by which we reached that outcome. Learning to avoid the outcome bias can help improve the quality of our decision making process.Human beings tend to be self-evaluative. We...
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- 4 years ago
The Focusing Effect – Don’t Look Back With Too Much Optimism
There’s a good reason that financial advisers tell us “past performance is no guarantee of future returns”. The focusing effect is a cognitive bias that causes us to attribute too much weight to events of the past and translate them into future expectations. Knowing how to handle the focusing effect can improve our decision making process not ju...
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- 3 years ago