Cognitive Biases

• Bounded Rationality 


  When people try to behave rationally but are restricted by factors such as lack of time to make decisions
• Bounded Self-Control


  When individuals lack the self-discipline to see their rational good intentions through
• Anchoring


  The tendency of individuals to rely on particular pieces of information when making choices between different goods and services
• Availability Bias


  When people make judgments about the probability of events by recalling recent instances
• Altruism (Fairness)


  Individuals are motivated to do the right thing, even if this means paying more for a good or service
• Choice Architecture


  Influencing consumer choices by the way the choices are presented
• Framing


  Influencing consumer choices by the way words and numbers are used
• Default Choice


  Influencing consumer behaviour by setting socially desirable choices as default options
• Mandated Choice


  Where people are legally required to make a choice
• Restricted Choice


  Giving consumers a limited number of options when making a choice
• Anchoring 


  people rely on the first piece of information we receive no matter how reliable the information is when we make decisions
• Herding


  A cognitive bias in consumer behavior where individuals follow the actions of others, often without fully understanding the decision-making process
• Mandated Choice Biases


  A type of cognitive bias where individuals are more likely to choose an option that is presented as the default or mandatory, even if it is not the best option for them
• Bounded Self-Control


  A concept in behavioral economics that describes how individuals struggle to make self-interested decisions when they have competing desires or impulses
• Bounded Rationality


  A theory that suggests individuals make rational decisions, but only within the limits of their cognitive abilities and the information available to them
• Default Choice Biases

  A type of cognitive bias where individuals tend to choose the default option, often without fully considering other alternatives or the consequences of their choice
• Availability Bias


  A cognitive bias where individuals judge the importance or likelihood of an event based on how easily examples come to mind, rather than on the objective probability or frequency
• Anchoring Effect


  The tendency to rely too heavily on the first piece of information encountered when making decisions or judgments
• Altruism


  A behavioral trait or psychological principle where an individual prioritizes the well-being and interests of others, often at the expense of their own self-interest
• Social Norms


  shared understandings within a social group about what is considered acceptable or unacceptable behavior in a given

  situation.