Cognitive Biases Practice Exam

Question 1 Cognitive Biases

What is scope insensitivity (scope neglect)?

The false consensus effect is the tendency to overestimate how much others agree with our beliefs and behaviors. We assume our opinions are more common than they actually are. Information bias is the tendency to seek more information even when it cannot affect the decision. Additional data can feel useful even if it is irrelevant, leading to analysis paralysis. Effort justification is a form of cognitive dissonance where people value outcomes more when they have put significant effort into achieving them. Harsh initiations make group membership feel more valuable. Scope insensitivity is the tendency to be insufficiently sensitive to the scale of a problem. People will donate similar amounts to save 2,000 or 200,000 birds, because the emotional response doesn't scale proportionally.

Question 2 Cognitive Biases

What is survivorship bias?

Survivorship bias is the error of focusing on successful examples while overlooking failures. Example: studying only successful entrepreneurs and concluding that dropping out of college leads to success. The nocebo effect occurs when negative expectations lead to negative outcomes. If a patient believes a treatment will cause side effects, they are more likely to experience them, even with a placebo. The illusion of transparency is the tendency to overestimate how apparent our internal states are to others. We think our nervousness, lies, or emotions are more visible than they actually are. The self-reference effect is the tendency for people to better encode and recall information that is related to themselves. Information processed in relation to the self is more memorable.

Question 3 Cognitive Biases

What is confirmation bias?

Confirmation bias is the tendency to search for, interpret, and remember information that confirms one's pre-existing beliefs while ignoring contradictory evidence. Example: only reading news sources that align with your political views. The representativeness heuristic is the tendency to judge the probability of something based on how similar it is to a prototype. Example: assuming a quiet, book-loving person is a librarian rather than a salesperson. Automation bias is the tendency to over-rely on automated systems and technology, even when they produce errors. People may ignore contradictory information from non-automated sources. Hyperbolic discounting is the tendency to prefer smaller, immediate rewards over larger, delayed rewards. The preference reverses as both rewards are pushed further into the future. It explains procrastination and impulsive spending.

Question 4 Cognitive Biases

What is the denomination effect?

The Pratfall effect is the tendency for an otherwise competent person to become more likeable after making a minor mistake. Small blunders make highly competent people seem more human and relatable. The denomination effect is the tendency to spend more when using small denominations or electronic payment versus large bills. People are reluctant to "break" a large bill. The curse of knowledge occurs when someone who is well-informed about a topic finds it difficult to think about it from the perspective of someone less informed. It impairs communication and teaching. Selective perception is the tendency to filter information based on expectations, allowing confirming information through while blocking disconfirming information. Fans of opposing sports teams will see different fouls in the same game.

Question 5 Cognitive Biases

What is the peak performance bias?

Peak performance bias is the tendency to judge people by their best moments rather than their average or typical behavior. This can lead to unrealistic expectations in hiring, relationships, and self-evaluation. The just-world hypothesis is the belief that people generally get what they deserve. This can lead to victim-blaming, where people assume bad things happen to those who somehow earned them. Reactance is the emotional reaction against perceived threats to one's freedom or autonomy. When people feel their choices are restricted, they often desire the forbidden option even more. Change blindness is the failure to detect changes in a visual scene, especially when the change occurs during a brief disruption. It reveals the limitations of visual attention and memory.

Question 6 Cognitive Biases

What is the representativeness heuristic?

The primacy effect is the tendency for first impressions to carry more weight than later information. Information presented early disproportionately shapes our overall perception of a person. The representativeness heuristic is the tendency to judge the probability of something based on how similar it is to a prototype. Example: assuming a quiet, book-loving person is a librarian rather than a salesperson. The Dunning-Kruger effect stems from poor metacognitive skills — the same knowledge needed to produce correct responses is also needed to recognize incorrect ones. Unskilled individuals lack the ability to evaluate their own competence. The bizarreness effect is the tendency to remember unusual or bizarre material better than common material. Incorporating odd imagery into study materials can enhance recall.

Question 7 Cognitive Biases

What is the Dunning-Kruger effect's relationship to metacognition?

The primacy effect is the tendency for first impressions to carry more weight than later information. Information presented early disproportionately shapes our overall perception of a person. Survivorship bias is the error of focusing on successful examples while overlooking failures. Example: studying only successful entrepreneurs and concluding that dropping out of college leads to success. The Dunning-Kruger effect stems from poor metacognitive skills — the same knowledge needed to produce correct responses is also needed to recognize incorrect ones. Unskilled individuals lack the ability to evaluate their own competence. The empathy gap (hot-cold empathy gap) is the tendency to underestimate the influence of emotional states on behavior and decisions. When calm, we misjudge what we'd do when angry, hungry, or in pain.

Question 8 Cognitive Biases

What is groupthink?

Distinction bias is the tendency to view two options as more different when evaluating them side by side than when evaluating them separately. It leads to overvaluing minor differences. Groupthink occurs when a group prioritizes harmony and conformity over critical thinking, leading to poor decision-making. Symptoms include illusions of invulnerability, self-censorship, and pressure on dissenters. Herd mentality (or mob mentality) is the tendency for individuals to follow the actions or beliefs of a larger group, often abandoning their own judgment. It is related to the bandwagon effect but often more extreme. The clustering illusion is the tendency to see patterns in random data. Example: believing a basketball player has a "hot hand" when their hits and misses are actually random.

Question 9 Cognitive Biases

What is optimism bias?

Optimism bias is the tendency to overestimate the likelihood of positive events and underestimate the likelihood of negative events happening to oneself. Example: believing you are less likely than average to get in a car accident. In impression formation, the negativity effect means that negative traits disproportionately influence overall impressions compared to positive traits. One rude act can outweigh many kind acts. Distinction bias is the tendency to view two options as more different when evaluating them side by side than when evaluating them separately. It leads to overvaluing minor differences. The illusion of control is the tendency to overestimate one's ability to influence events that are largely determined by chance. Example: blowing on dice before rolling them in a game.

Question 10 Cognitive Biases

What is the ambiguity effect?

The Pygmalion effect (Rosenthal effect) occurs when higher expectations lead to improved performance. In education, teachers' positive expectations of students can become self-fulfilling prophecies. Declinism is the tendency to view the past favorably and believe that society is in decline. People often romanticize previous eras while focusing on current problems. The ambiguity effect is the tendency to avoid options where the probability of a favorable outcome is unknown. People prefer known risks over unknown risks, even when the unknown option may be better. Loss aversion, identified by Kahneman and Tversky, is the principle that losses feel roughly twice as painful as equivalent gains feel pleasurable. It is a core concept in prospect theory.

Question 11 Cognitive Biases

What is the negativity bias?

Negativity bias is the tendency for negative experiences, emotions, or information to have a greater impact on psychological states than positive ones of equal intensity. Bad news sticks more than good news. The availability heuristic is the tendency to judge the likelihood of events based on how easily examples come to mind. Example: overestimating the risk of shark attacks because they receive heavy media coverage. Anchoring bias occurs when people rely too heavily on the first piece of information encountered (the "anchor") when making decisions. Example: a high initial price makes a subsequent discount seem like a great deal. The ambiguity effect is the tendency to avoid options where the probability of a favorable outcome is unknown. People prefer known risks over unknown risks, even when the unknown option may be better.

Question 12 Cognitive Biases

What is the in-group bias?

Pareidolia is the tendency to perceive meaningful patterns (especially faces) in random or ambiguous stimuli. Examples include seeing faces in clouds, toast, or power outlets. In-group bias is the tendency to favor members of one's own group over outsiders. It can manifest as more positive evaluations, greater trust, and preferential treatment toward in-group members. Effort justification is a form of cognitive dissonance where people value outcomes more when they have put significant effort into achieving them. Harsh initiations make group membership feel more valuable. Naive realism is the belief that we see the world objectively and that people who disagree must be uninformed, irrational, or biased. It is a major source of interpersonal and political conflict.

Question 13 Cognitive Biases

What is Weber's Law and how does it relate to bias?

The bandwagon effect is the tendency to adopt beliefs or behaviors because many other people do. It is driven by social conformity and the desire to belong to the group. Weber's Law states that the just noticeable difference is proportional to the stimulus magnitude. In decision-making, this means we notice a $5 discount more on a $20 item than on a $500 item, even though the savings are the same. The contrast effect occurs when perception of something is influenced by comparison with something recently observed. Example: a mediocre candidate seems better after interviewing a terrible one. In-group bias is the tendency to favor members of one's own group over outsiders. It can manifest as more positive evaluations, greater trust, and preferential treatment toward in-group members.

Question 14 Cognitive Biases

What is the conjunction fallacy?

The conjunction fallacy occurs when people assume that a specific condition is more probable than a general one. In the famous "Linda problem," people judged "feminist bank teller" as more likely than "bank teller" alone. Prospect theory, developed by Kahneman and Tversky, describes how people make decisions involving risk. Key insights include loss aversion, reference dependence, and diminishing sensitivity to gains and losses. Optimism bias is the tendency to overestimate the likelihood of positive events and underestimate the likelihood of negative events happening to oneself. Example: believing you are less likely than average to get in a car accident. Moral licensing occurs when doing something good gives people psychological permission to then do something bad. Example: exercising in the morning and then overeating, feeling you've "earned" it.

Question 15 Cognitive Biases

What is the primacy effect in social psychology?

The identifiable victim effect is the tendency to respond more strongly to a single, identifiable person in need than to a large, anonymous group. "One death is a tragedy; a million is a statistic." Hindsight bias is the tendency to believe, after an event has occurred, that one would have predicted it beforehand. Also called the "I-knew-it-all-along" effect. The primacy effect is the tendency for first impressions to carry more weight than later information. Information presented early disproportionately shapes our overall perception of a person. The halo effect is the tendency for an overall positive impression of a person to influence judgments about their specific traits. Example: assuming an attractive person is also intelligent and kind.

Question 16 Cognitive Biases

What is belief perseverance?

Belief perseverance is the tendency to cling to one's initial beliefs even after the evidence supporting them has been discredited. Simply presenting counter-evidence is often insufficient to change deeply held beliefs. The base rate fallacy is the tendency to ignore general statistical information (base rates) in favor of specific case information. Example: fearing terrorism on planes while ignoring the far higher base rate of car accident deaths. The self-reference effect is the tendency for people to better encode and recall information that is related to themselves. Information processed in relation to the self is more memorable. Choice overload occurs when too many options lead to decision paralysis, anxiety, or dissatisfaction. Barry Schwartz argued that more choices can decrease happiness and increase regret.

Question 17 Cognitive Biases

What is the herd mentality?

Herd mentality (or mob mentality) is the tendency for individuals to follow the actions or beliefs of a larger group, often abandoning their own judgment. It is related to the bandwagon effect but often more extreme. The empathy gap (hot-cold empathy gap) is the tendency to underestimate the influence of emotional states on behavior and decisions. When calm, we misjudge what we'd do when angry, hungry, or in pain. The gambler's fallacy is the mistaken belief that past random events affect future probabilities. Example: believing a coin is "due" for heads after several tails, when each flip is independent. The Pygmalion effect (Rosenthal effect) occurs when higher expectations lead to improved performance. In education, teachers' positive expectations of students can become self-fulfilling prophecies.

Question 18 Cognitive Biases

What is the clustering illusion?

The hot-hand fallacy is the belief that a person who has been successful will continue to be successful, even when each event is independent. Despite feeling real, research shows "streaks" are often within normal randomness. Anchoring and adjustment is a heuristic where people start from an initial value (anchor) and adjust insufficiently to reach a final answer. The adjustment is typically too small, leaving estimates biased toward the anchor. The false consensus effect is the tendency to overestimate how much others agree with our beliefs and behaviors. We assume our opinions are more common than they actually are. The clustering illusion is the tendency to see patterns in random data. Example: believing a basketball player has a "hot hand" when their hits and misses are actually random.

Question 19 Cognitive Biases

What is prospect theory?

The fundamental attribution error is the tendency to overemphasize personality traits and underestimate situational factors when explaining others' behavior. Example: assuming a rude waiter is a bad person rather than having a bad day. Groupthink occurs when a group prioritizes harmony and conformity over critical thinking, leading to poor decision-making. Symptoms include illusions of invulnerability, self-censorship, and pressure on dissenters. Prospect theory, developed by Kahneman and Tversky, describes how people make decisions involving risk. Key insights include loss aversion, reference dependence, and diminishing sensitivity to gains and losses. The Dunning-Kruger effect stems from poor metacognitive skills — the same knowledge needed to produce correct responses is also needed to recognize incorrect ones. Unskilled individuals lack the ability to evaluate their own competence.

Question 20 Cognitive Biases

What is the gambler's fallacy?

Outcome bias is the tendency to judge a decision based on its outcome rather than on the quality of the decision at the time it was made. A bad decision can have a good outcome and vice versa. The gambler's fallacy is the mistaken belief that past random events affect future probabilities. Example: believing a coin is "due" for heads after several tails, when each flip is independent. Automation bias is the tendency to over-rely on automated systems and technology, even when they produce errors. People may ignore contradictory information from non-automated sources. Pareidolia is the tendency to perceive meaningful patterns (especially faces) in random or ambiguous stimuli. Examples include seeing faces in clouds, toast, or power outlets.

Question 21 Cognitive Biases

What is outcome bias?

Hindsight bias is the tendency to believe, after an event has occurred, that one would have predicted it beforehand. Also called the "I-knew-it-all-along" effect. The spotlight effect is the tendency to overestimate how much others notice our appearance and behavior. In reality, people pay far less attention to us than we think. Outcome bias is the tendency to judge a decision based on its outcome rather than on the quality of the decision at the time it was made. A bad decision can have a good outcome and vice versa. The sunk cost fallacy is the tendency to continue investing in something because of previously invested resources (time, money, effort) rather than evaluating current and future value. Example: finishing a bad movie because you already paid for the ticket.

Question 22 Cognitive Biases

What is the ostrich effect?

The decoy effect occurs when the introduction of a third, inferior option makes one of the original options look more attractive. Marketers use this to steer consumers toward a preferred product. The ostrich effect is the tendency to avoid negative information by "burying one's head in the sand." Example: avoiding checking your bank account or investment portfolio during a market downturn. Pareidolia is the tendency to perceive meaningful patterns (especially faces) in random or ambiguous stimuli. Examples include seeing faces in clouds, toast, or power outlets. The illusion of control is the tendency to overestimate one's ability to influence events that are largely determined by chance. Example: blowing on dice before rolling them in a game.

Question 23 Cognitive Biases

What is functional fixedness?

Change blindness is the failure to detect changes in a visual scene, especially when the change occurs during a brief disruption. It reveals the limitations of visual attention and memory. Functional fixedness is a cognitive bias that limits a person to using an object only in the way it is traditionally used. It impairs creative problem-solving by preventing novel uses of familiar objects. Effort justification is a form of cognitive dissonance where people value outcomes more when they have put significant effort into achieving them. Harsh initiations make group membership feel more valuable. The affect heuristic occurs when current emotions influence judgments and decisions. If you feel positive about something, you tend to judge its risks as low and its benefits as high.

Question 24 Cognitive Biases

What is the bandwagon effect?

The contrast effect occurs when perception of something is influenced by comparison with something recently observed. Example: a mediocre candidate seems better after interviewing a terrible one. The illusion of transparency is the tendency to overestimate how apparent our internal states are to others. We think our nervousness, lies, or emotions are more visible than they actually are. The bandwagon effect is the tendency to adopt beliefs or behaviors because many other people do. It is driven by social conformity and the desire to belong to the group. Reactance theory, proposed by Jack Brehm, states that when people feel their freedom to choose is threatened, they experience psychological reactance — an unpleasant motivational state that drives them to restore the threatened freedom.

Question 25 Cognitive Biases

What is the focusing illusion?

The fundamental attribution error is the tendency to overemphasize personality traits and underestimate situational factors when explaining others' behavior. Example: assuming a rude waiter is a bad person rather than having a bad day. From a psychological perspective, the broken window theory suggests that visible signs of disorder encourage further disorder. Seeing litter makes people more likely to litter — environmental cues activate norms about acceptable behavior. Confirmation bias is the tendency to search for, interpret, and remember information that confirms one's pre-existing beliefs while ignoring contradictory evidence. Example: only reading news sources that align with your political views. The focusing illusion, described by Kahneman, is the idea that "nothing in life is as important as you think it is while you are thinking about it." Attention to a factor inflates its perceived importance.

Question 26 Cognitive Biases

What is the sunk cost fallacy?

The sunk cost fallacy is the tendency to continue investing in something because of previously invested resources (time, money, effort) rather than evaluating current and future value. Example: finishing a bad movie because you already paid for the ticket. The bystander effect is the phenomenon where individuals are less likely to help a victim when others are present. Diffusion of responsibility increases with the number of bystanders. Pareidolia is the tendency to perceive meaningful patterns (especially faces) in random or ambiguous stimuli. Examples include seeing faces in clouds, toast, or power outlets. The primacy effect is the tendency for first impressions to carry more weight than later information. Information presented early disproportionately shapes our overall perception of a person.

Question 27 Cognitive Biases

What is the Dunning-Kruger effect?

The contrast effect occurs when perception of something is influenced by comparison with something recently observed. Example: a mediocre candidate seems better after interviewing a terrible one. Proportionality bias is the assumption that big events must have big causes. It contributes to conspiracy theories — people struggle to accept that major events (e.g., assassinations) can have simple explanations. The Dunning-Kruger effect is a cognitive bias in which people with low ability overestimate their competence, while highly skilled individuals tend to underestimate theirs. It reflects a lack of metacognitive ability. From a psychological perspective, the broken window theory suggests that visible signs of disorder encourage further disorder. Seeing litter makes people more likely to litter — environmental cues activate norms about acceptable behavior.

Question 28 Cognitive Biases

What is the actor-observer bias?

The illusion of transparency is the tendency to overestimate how apparent our internal states are to others. We think our nervousness, lies, or emotions are more visible than they actually are. The Pygmalion effect (Rosenthal effect) occurs when higher expectations lead to improved performance. In education, teachers' positive expectations of students can become self-fulfilling prophecies. Naive realism is the belief that we see the world objectively and that people who disagree must be uninformed, irrational, or biased. It is a major source of interpersonal and political conflict. The actor-observer bias is the tendency to attribute our own behavior to situational factors but others' behavior to dispositional factors. It is a variant of the fundamental attribution error applied to oneself vs. others.

Question 29 Cognitive Biases

What is the hot-hand fallacy?

The hot-hand fallacy is the belief that a person who has been successful will continue to be successful, even when each event is independent. Despite feeling real, research shows "streaks" are often within normal randomness. Recency bias is the tendency to give disproportionate weight to the most recent events or information when making judgments. Example: evaluating an employee based mostly on their last month of performance. The illusion of transparency is the tendency to overestimate how apparent our internal states are to others. We think our nervousness, lies, or emotions are more visible than they actually are. The base rate fallacy is the tendency to ignore general statistical information (base rates) in favor of specific case information. Example: fearing terrorism on planes while ignoring the far higher base rate of car accident deaths.

Question 30 Cognitive Biases

What is proportionality bias?

Proportionality bias is the assumption that big events must have big causes. It contributes to conspiracy theories — people struggle to accept that major events (e.g., assassinations) can have simple explanations. Anchoring bias occurs when people rely too heavily on the first piece of information encountered (the "anchor") when making decisions. Example: a high initial price makes a subsequent discount seem like a great deal. The Ben Franklin effect is the phenomenon where doing a favor for someone makes you like them more. It demonstrates cognitive dissonance — we rationalize the effort by convincing ourselves we like the person. Optimism bias is the tendency to overestimate the likelihood of positive events and underestimate the likelihood of negative events happening to oneself. Example: believing you are less likely than average to get in a car accident.

Question 31 Cognitive Biases

What is the planning fallacy?

The IKEA effect is the tendency to place higher value on things we helped create, regardless of quality. People overvalue self-assembled furniture, homemade food, or personal projects. Anchoring and adjustment is a heuristic where people start from an initial value (anchor) and adjust insufficiently to reach a final answer. The adjustment is typically too small, leaving estimates biased toward the anchor. The less-is-better effect occurs when a smaller or lesser option is preferred when evaluated alone, but not when compared side by side. Example: a $45 scarf in a fancy box seems better than a $55 coat without packaging. The planning fallacy is the tendency to underestimate the time, cost, and effort needed to complete a task, even when past experience suggests it will take longer. It was identified by Kahneman and Tversky.

Question 32 Cognitive Biases

What is moral licensing?

The illusion of control is the tendency to overestimate one's ability to influence events that are largely determined by chance. Example: blowing on dice before rolling them in a game. Moral licensing occurs when doing something good gives people psychological permission to then do something bad. Example: exercising in the morning and then overeating, feeling you've "earned" it. The decoy effect occurs when the introduction of a third, inferior option makes one of the original options look more attractive. Marketers use this to steer consumers toward a preferred product. In-group bias is the tendency to favor members of one's own group over outsiders. It can manifest as more positive evaluations, greater trust, and preferential treatment toward in-group members.

Question 33 Cognitive Biases

What is the identifiable victim effect?

The Google effect is the tendency to forget information that can easily be found online. People remember less when they know a search engine can provide the answer, but better remember where to find it. The identifiable victim effect is the tendency to respond more strongly to a single, identifiable person in need than to a large, anonymous group. "One death is a tragedy; a million is a statistic." Prospect theory, developed by Kahneman and Tversky, describes how people make decisions involving risk. Key insights include loss aversion, reference dependence, and diminishing sensitivity to gains and losses. The gambler's fallacy is the mistaken belief that past random events affect future probabilities. Example: believing a coin is "due" for heads after several tails, when each flip is independent.

Question 34 Cognitive Biases

What is the peak-end rule?

The spotlight effect is the tendency to overestimate how much others notice our appearance and behavior. In reality, people pay far less attention to us than we think. Inattentional blindness is the failure to notice a fully visible object when attention is focused elsewhere. The famous "invisible gorilla" experiment by Simons and Chabris demonstrated this. The peak-end rule states that people judge an experience based on its most intense moment (peak) and how it ended, rather than the average of the experience. This was demonstrated by Daniel Kahneman. The actor-observer bias is the tendency to attribute our own behavior to situational factors but others' behavior to dispositional factors. It is a variant of the fundamental attribution error applied to oneself vs. others.

Question 35 Cognitive Biases

What is the bizarreness effect?

The bizarreness effect is the tendency to remember unusual or bizarre material better than common material. Incorporating odd imagery into study materials can enhance recall. Reactance theory, proposed by Jack Brehm, states that when people feel their freedom to choose is threatened, they experience psychological reactance — an unpleasant motivational state that drives them to restore the threatened freedom. Anchoring bias occurs when people rely too heavily on the first piece of information encountered (the "anchor") when making decisions. Example: a high initial price makes a subsequent discount seem like a great deal. Confirmation bias is the tendency to search for, interpret, and remember information that confirms one's pre-existing beliefs while ignoring contradictory evidence. Example: only reading news sources that align with your political views.

Question 36 Cognitive Biases

What is change blindness?

Inattentional blindness is the failure to notice a fully visible object when attention is focused elsewhere. The famous "invisible gorilla" experiment by Simons and Chabris demonstrated this. Choice overload occurs when too many options lead to decision paralysis, anxiety, or dissatisfaction. Barry Schwartz argued that more choices can decrease happiness and increase regret. Change blindness is the failure to detect changes in a visual scene, especially when the change occurs during a brief disruption. It reveals the limitations of visual attention and memory. Normalcy bias is the tendency to underestimate the likelihood or impact of a disaster and assume things will function normally. It can slow response times during emergencies like evacuations.

Question 37 Cognitive Biases

What is the bystander effect?

Omission bias is the tendency to judge harmful actions as worse than equally harmful inactions. People may feel more guilty about causing harm through action (commission) than through failure to act (omission). The endowment effect is the tendency to value something more once we own it compared to when we don't. Example: demanding more to sell a coffee mug than you would pay to buy one. The sunk cost fallacy is the tendency to continue investing in something because of previously invested resources (time, money, effort) rather than evaluating current and future value. Example: finishing a bad movie because you already paid for the ticket. The bystander effect is the phenomenon where individuals are less likely to help a victim when others are present. Diffusion of responsibility increases with the number of bystanders.

Question 38 Cognitive Biases

What is naive realism?

The Ben Franklin effect is the phenomenon where doing a favor for someone makes you like them more. It demonstrates cognitive dissonance — we rationalize the effort by convincing ourselves we like the person. Naive realism is the belief that we see the world objectively and that people who disagree must be uninformed, irrational, or biased. It is a major source of interpersonal and political conflict. Weber's Law states that the just noticeable difference is proportional to the stimulus magnitude. In decision-making, this means we notice a $5 discount more on a $20 item than on a $500 item, even though the savings are the same. Loss aversion, identified by Kahneman and Tversky, is the principle that losses feel roughly twice as painful as equivalent gains feel pleasurable. It is a core concept in prospect theory.

Question 39 Cognitive Biases

What is the automation bias?

Subjective validation is the tendency to perceive two unrelated events as connected because a belief or expectation demands a relationship. It underlies belief in astrology, psychic readings, and superstitions. Scope insensitivity is the tendency to be insufficiently sensitive to the scale of a problem. People will donate similar amounts to save 2,000 or 200,000 birds, because the emotional response doesn't scale proportionally. Loss aversion, identified by Kahneman and Tversky, is the principle that losses feel roughly twice as painful as equivalent gains feel pleasurable. It is a core concept in prospect theory. Automation bias is the tendency to over-rely on automated systems and technology, even when they produce errors. People may ignore contradictory information from non-automated sources.

Question 40 Cognitive Biases

What is hyperbolic discounting?

Reactance is the emotional reaction against perceived threats to one's freedom or autonomy. When people feel their choices are restricted, they often desire the forbidden option even more. Hyperbolic discounting is the tendency to prefer smaller, immediate rewards over larger, delayed rewards. The preference reverses as both rewards are pushed further into the future. It explains procrastination and impulsive spending. The fundamental attribution error is the tendency to overemphasize personality traits and underestimate situational factors when explaining others' behavior. Example: assuming a rude waiter is a bad person rather than having a bad day. System justification bias is the tendency to defend and justify existing social, economic, and political systems, even at the expense of one's own group or self-interest.

Question 41 Cognitive Biases

What is the nocebo effect?

The base rate fallacy is the tendency to ignore general statistical information (base rates) in favor of specific case information. Example: fearing terrorism on planes while ignoring the far higher base rate of car accident deaths. The nocebo effect occurs when negative expectations lead to negative outcomes. If a patient believes a treatment will cause side effects, they are more likely to experience them, even with a placebo. The denomination effect is the tendency to spend more when using small denominations or electronic payment versus large bills. People are reluctant to "break" a large bill. Loss aversion, identified by Kahneman and Tversky, is the principle that losses feel roughly twice as painful as equivalent gains feel pleasurable. It is a core concept in prospect theory.

Question 42 Cognitive Biases

What is anchoring bias?

Anchoring bias occurs when people rely too heavily on the first piece of information encountered (the "anchor") when making decisions. Example: a high initial price makes a subsequent discount seem like a great deal. Anchoring and adjustment is a heuristic where people start from an initial value (anchor) and adjust insufficiently to reach a final answer. The adjustment is typically too small, leaving estimates biased toward the anchor. The less-is-better effect occurs when a smaller or lesser option is preferred when evaluated alone, but not when compared side by side. Example: a $45 scarf in a fancy box seems better than a $55 coat without packaging. Herd mentality (or mob mentality) is the tendency for individuals to follow the actions or beliefs of a larger group, often abandoning their own judgment. It is related to the bandwagon effect but often more extreme.

Question 43 Cognitive Biases

What is reactance?

The mere exposure effect is the tendency to develop a preference for things simply because we are familiar with them. Repeated exposure increases liking, even without conscious awareness. Reactance is the emotional reaction against perceived threats to one's freedom or autonomy. When people feel their choices are restricted, they often desire the forbidden option even more. Scope insensitivity is the tendency to be insufficiently sensitive to the scale of a problem. People will donate similar amounts to save 2,000 or 200,000 birds, because the emotional response doesn't scale proportionally. Naive realism is the belief that we see the world objectively and that people who disagree must be uninformed, irrational, or biased. It is a major source of interpersonal and political conflict.

Question 44 Cognitive Biases

What is the projection bias?

The spotlight effect is the tendency to overestimate how much others notice our appearance and behavior. In reality, people pay far less attention to us than we think. The representativeness heuristic is the tendency to judge the probability of something based on how similar it is to a prototype. Example: assuming a quiet, book-loving person is a librarian rather than a salesperson. The curse of knowledge occurs when someone who is well-informed about a topic finds it difficult to think about it from the perspective of someone less informed. It impairs communication and teaching. Projection bias is the tendency to assume that others share our current thoughts, feelings, or values. It also refers to projecting current preferences onto our future selves.

Question 45 Cognitive Biases

What is hindsight bias?

Omission bias is the tendency to judge harmful actions as worse than equally harmful inactions. People may feel more guilty about causing harm through action (commission) than through failure to act (omission). Effort justification is a form of cognitive dissonance where people value outcomes more when they have put significant effort into achieving them. Harsh initiations make group membership feel more valuable. Selective perception is the tendency to filter information based on expectations, allowing confirming information through while blocking disconfirming information. Fans of opposing sports teams will see different fouls in the same game. Hindsight bias is the tendency to believe, after an event has occurred, that one would have predicted it beforehand. Also called the "I-knew-it-all-along" effect.

Question 46 Cognitive Biases

What is the authority bias?

Authority bias is the tendency to attribute greater accuracy to the opinions of an authority figure and be more influenced by them, even when the authority is not an expert in the relevant field. Outcome bias is the tendency to judge a decision based on its outcome rather than on the quality of the decision at the time it was made. A bad decision can have a good outcome and vice versa. The base rate fallacy is the tendency to ignore general statistical information (base rates) in favor of specific case information. Example: fearing terrorism on planes while ignoring the far higher base rate of car accident deaths. Zero-risk bias is the preference for completely eliminating one small risk over a larger overall risk reduction. People prefer certainty even when the alternative provides greater expected benefit.

Question 47 Cognitive Biases

What is the fundamental attribution error?

Automation bias is the tendency to over-rely on automated systems and technology, even when they produce errors. People may ignore contradictory information from non-automated sources. The fundamental attribution error is the tendency to overemphasize personality traits and underestimate situational factors when explaining others' behavior. Example: assuming a rude waiter is a bad person rather than having a bad day. Scope insensitivity is the tendency to be insufficiently sensitive to the scale of a problem. People will donate similar amounts to save 2,000 or 200,000 birds, because the emotional response doesn't scale proportionally. The affect heuristic occurs when current emotions influence judgments and decisions. If you feel positive about something, you tend to judge its risks as low and its benefits as high.

Question 48 Cognitive Biases

What is the Ben Franklin effect?

Reactance theory, proposed by Jack Brehm, states that when people feel their freedom to choose is threatened, they experience psychological reactance — an unpleasant motivational state that drives them to restore the threatened freedom. Automation bias is the tendency to over-rely on automated systems and technology, even when they produce errors. People may ignore contradictory information from non-automated sources. System justification bias is the tendency to defend and justify existing social, economic, and political systems, even at the expense of one's own group or self-interest. The Ben Franklin effect is the phenomenon where doing a favor for someone makes you like them more. It demonstrates cognitive dissonance — we rationalize the effort by convincing ourselves we like the person.

Question 49 Cognitive Biases

What is information bias?

Survivorship bias is the error of focusing on successful examples while overlooking failures. Example: studying only successful entrepreneurs and concluding that dropping out of college leads to success. Information bias is the tendency to seek more information even when it cannot affect the decision. Additional data can feel useful even if it is irrelevant, leading to analysis paralysis. The Dunning-Kruger effect is a cognitive bias in which people with low ability overestimate their competence, while highly skilled individuals tend to underestimate theirs. It reflects a lack of metacognitive ability. The sunk cost fallacy is the tendency to continue investing in something because of previously invested resources (time, money, effort) rather than evaluating current and future value. Example: finishing a bad movie because you already paid for the ticket.

Question 50 Cognitive Biases

What is anchoring and adjustment?

Weber's Law states that the just noticeable difference is proportional to the stimulus magnitude. In decision-making, this means we notice a $5 discount more on a $20 item than on a $500 item, even though the savings are the same. The decoy effect occurs when the introduction of a third, inferior option makes one of the original options look more attractive. Marketers use this to steer consumers toward a preferred product. The contrast effect occurs when perception of something is influenced by comparison with something recently observed. Example: a mediocre candidate seems better after interviewing a terrible one. Anchoring and adjustment is a heuristic where people start from an initial value (anchor) and adjust insufficiently to reach a final answer. The adjustment is typically too small, leaving estimates biased toward the anchor.