I just came across this, and it starts with a financial example:
https://www.theatlantic.com/magazine/ar ... as/565775/
It seems to be available without a paywall.
RM
"Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
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"Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
This signature is a placebo. You are in the control group.
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Re: "Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
I’m not sure if that experiment is a great example of present bias. Perhaps people know that waiting a month provides the higher return, but maybe they are cash strapped and need that money now.
Would be better if they did the experiment only with rich people.
Would be better if they did the experiment only with rich people.
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Re: "Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
Also, that $30 in the first example isn't all that much for most people.HEDGEFUNDIE wrote: ↑Sun Aug 19, 2018 1:01 pm I’m not sure if that experiment is a great example of present bias. Perhaps people know that waiting a month provides the higher return, but maybe they are cash strapped and need that money now.
Would be better if they did the experiment only with rich people.
At least for us, if it was enough of a difference to, well, make a difference... we'd no doubt react, er, differently.
(Isn't that what most of us do with retirement savings? That delay is certainly hoped to make a major difference.)
But the issue of "cognitive biases" is important to recognize.
RM
This signature is a placebo. You are in the control group.
Re: "Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
Thanks for an interesting article on a fascinating topic. Daniel Kahneman and others have said that awareness of our biases is a first and key step in dealing with them. This article shows some of those possible steps and the author seems to feel that after "immersing" himself in the field he has "noticed a few changes in my behavior." Yet his immediate example of this change - paying another $2 for a bottle of water after the first bottle failed to exit the vending machine - seemed weak. Unrelatedly, or maybe not, I also thought the author, putting a mere $2 ahead of obvious thirst, might be a Boglehead.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: "Cognitive Biases Tricking Your Brain" (The Atlantic, Sept 2018)
thanks. nice article.
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