Denomination Effect
A cognitive bias where people are less likely to spend large denominations of money compared to an equivalent amount in smaller denominations.
127 topics found for
“economic behavior”
Commitment Device
A technique or tool used to lock oneself into following through on a commitment, often by adding a cost to failing to do so.
Scarcity Principle
The economic theory that suggests limited availability of a resource increases its value, influencing decision-making and behavior.
Winner’s Curse
A phenomenon where the winner of an auction tends to overpay due to emotional competition, leading to a less favorable outcome than anticipated.
Representativeness
Representativeness is a heuristic in decision-making where individuals judge the probability of an event based on how much it resembles a typical case.
Subadditivity Effect
A cognitive bias where the total probability assigned to a set of events is less than the sum of the probabilities assigned to each event individually.
Optimism Bias
A cognitive bias that causes people to believe they are less likely to experience negative events and more likely to experience positive events than others.
Escalation of Commitment
A cognitive bias where individuals or organizations continue to invest in a failing project or decision due to the amount of resources already committed.
Gambler’s Fallacy
A cognitive bias where individuals believe that past random events affect the probabilities of future random events.