A close relative to the previously mentioned Confirmation Bias, Overconfidence is the tendency to overestimate our own abilities (i.e., we aren’t as smart as we think we are). We tend to think that we are much better forecasters and estimators than we…
We let confirmation bias take control of our mind by only seeking out information from sources that agree with our pre-existing beliefs. Conversely, we tend to ignore and dismiss information (= disconfirming evidence) which tend to disprove our initial impressions. It’s the tendency to interpret the glass…
When it comes to mathematical functions, the human brain can easily comprehend “Linear Function or Simple Interest”, but we are genetically unfit to comprehend “Exponential Function or Compound Interest” and its massive impact years down the road. When it comes to interest…
Have you also observed that many people behave as if not all dollars are created equal? By assigning relative values to different moneys that in reality have the same buying power, they run the risk of being too quick to spend,…