Bounded Rationality describes the practical decision-making processes individuals and organizations use when perfect information is unavailable, emphasizing satisfactory outcomes over optimal ones. It addresses the limitations of human cognition in economic models.
An in-depth exploration of the concept of Money Illusion, where individuals misinterpret nominal changes in wages and prices as real gains, without accounting for inflation.
Overconfidence Bias: A cognitive bias characterized by an individual's excessive confidence in their own abilities or knowledge. It occurs when investors overestimate their knowledge or ability to predict market movements, leading to undue risk-taking.
Understanding the role of reference points in decision-making processes through the lens of prospect theory.
Understanding anchoring in investing, including its definition, examples, psychological impact, and strategies to mitigate its effects.
Explore the phenomenon of hindsight bias, its causes, real-world examples, and answers to frequently asked questions. Learn why it is crucial for investors and others to recognize and mitigate its effects.
