Asked by Abylay Tastanbekov on May 12, 2024
Verified
Over-precision is a form of:
A) the law of small numbers.
B) anchoring.
C) framing.
D) salience.
Over-precision
The tendency to be too confident in one's own judgments, estimates, or predictions, often leading to errors or miscalculations.
Law Of Small Numbers
Tendency to overstate the probability that a certain event will occur when faced with relatively little information.
Anchoring
A cognitive bias in decision making where an individual relies too heavily on an initial piece of information to make subsequent judgments.
- Perceive the influence of behavioral biases, namely overconfidence, over-optimism, and over-precision, on the decision-making process of investors and the creation of phenomena like market bubbles.
Verified Answer
LL
Laurin LeStrangeMay 14, 2024
Final Answer :
A
Explanation :
Over-precision is a bias that occurs when individuals place too much confidence in their judgments or estimates, often due to a small sample size or limited information. This is a form of the law of small numbers, which refers to the tendency to assume that small samples or limited information are representative of the larger population.
Learning Objectives
- Perceive the influence of behavioral biases, namely overconfidence, over-optimism, and over-precision, on the decision-making process of investors and the creation of phenomena like market bubbles.