Bias info
There are lots of types of Bias. Many of them are specific tp certain industries, technologies or situations. Here are some that are relevant to digital channels.
Common types of Bias that are relevant to digital channel`s
1 Overconfidence Bias
Overconfidence results from someone’s false sense of their skill, talent, or self-belief. It can be a dangerous bias and is very prolific in behavioral finance and capital markets.
The most common manifestations of overconfidence include the illusion of control, timing optimism, and the desirability effect. (The desirability effect is the belief that something will happen because you want it to.)
2 Self Serving Bias
Self-serving cognitive bias is the propensity to attribute positive outcomes to skill and negative outcomes to luck.
3 Herd Mentality
Herd mentality is when people blindly copy and follow what other succesful people are doing. When they do this, they are being influenced by emotion, rather than by independent analysis.
There are four main types: self-deception, heuristic simplification, emotion, and social bias.
4 Loss Aversion
Loss aversion is a tendency for people to fear losses and avoid them more than they focus on trying to make profits.
5 Framing Cognitive Bias
Framing is when someone makes a decision because of the way information is presented to them, rather than based just on the facts.
6 Narrative Fallacy
The narrative fallacy occurs because we naturally like stories and find them easier to make sense of and relate to.
It means we can be prone to choose less desirable outcomes due to the fact they have a better story behind them. This cognitive bias is similar to the framing bias.
7 Anchoring Bias
Anchoring is the idea that we use pre-existing data as a reference point for all subsequent data, which can skew our decision-making processes.
If you see a car that costs $85,000 and then another car that costs $30,000, you could be influenced to think the second car is very cheap. Whereas, if you saw a $5,000 car first and the $30,000 one second, you might think it’s very expensive.
8 Confirmation Bias
Confirmation bias is the idea that people seek out information and data that confirms their pre-existing ideas. They tend to ignore contrary information.
9 Hindsight Bias
Hindsight bias is the theory that when people predict a correct outcome, they wrongly believe that they “knew it all along”.
10 Representativeness Heuristic
Representativeness heuristic, is a cognitive bias that happens when people falsely believe that if two objects are similar, then they are also correlated with each other.
That is not always the case. (Have a look at Gestalt Principles)
Resources
10 Cognitive Biases That Distort Your Thinking @ VeryWellMind
Top 10 types of Bias @ Corporate Finance Institute