STATUS QUO BIAS

Irrationally wanting things to stay the same, also called inertia.  We do this in part because we want to avoid costs, even when they’re offset by a larger gain, a process psychologists call “Loss aversion”. You hold onto a mutual fund…

Continue reading

Bandwagon Bias

Believing that something is true only because other people think it is. Whether politicians or stocks, people like being associated with things that are winning, so winners build momentum, not because they deserve it, but because they’re winning. This is…

Continue reading