Asked by
julia houser
on Dec 22, 2024Verified
Stockbrokers often believe that their own expertise will enable them to select stocks that will outperform the market average. This belief best illustrates
A) confirmation bias.
B) the framing effect.
C) the representativeness heuristic.
D) overconfidence.
Overconfidence
The phenomenon where an individual's belief in their own abilities exceeds the accuracy of those abilities.
Framing Effect
A cognitive bias where people react differently based on the way information is presented to them, demonstrating how context and framing can influence decision making.
Representativeness Heuristic
A mental shortcut used to make judgments about the probability of an event under uncertainty, based on how similar it is to our typical idea of the event.
- Appreciate the effects of overconfidence on the quality of judgment and decision-making.
Verified Answer
JM
Learning Objectives
- Appreciate the effects of overconfidence on the quality of judgment and decision-making.