Representative heuristic

Stop stereotyping

Representativeness heuristic refers to the fact that we stereotype. It’s a mental shortcut. But beware of making unfounded comparisons.
risk and uncertainty in economics

Learn to deal with uncertainty

Risk and uncertainty will always surround us. Gambler's Fallacy, the hot-hand effect, the law of small numbers & ambiguity aversion are just some of the biases that arise because of it.
Availability effect definition

We prefer wrong information to no information

Availability bias and survivorship bias influence our decision-making. We make decisions based on the information available to us.
Primacy and recency effects

The power of first impressions

The order of information influences your decisions. First impressions matter! It's all got to do with primacy and recency effects.
Hyperbolic vs exponential discounting

The problem with wanting it NOW

When you delay instant gratification, you will experience long-term satisfaction. That's hyperbolic vs exponential discounting. Don't let present bias win!
Proctrastination is the enemy of success

Procrastination is the enemy of success

We know procrastination is the enemy of success. But while it looks like laziness, it's often just mental exhaustion at play. Learn how to overcome procrastination.
How to improve self control

How to improve self-control

Self-control is an essential life skill. It's what separates humans from the rest of the animal kingdom. Learn how to improve self-control to achieve your long-term goals.
The endowment effect and IKEA effect

What’s mine is more valuable

In this post, you'll learn why you place extra value on things you already own. The endowment effect has implications for our investment portfolio, bonuses and consumer behaviour.
Sunk cost and the concorde effect

When the past influences the future

The Concorde effect is a famous example of sunk cost investment. Too often we invest time, money and energy into something we should've just abandoned.
Examples of regret avoidance

Regret | It’s not a nice feeling

Regret influences the decisions we make and pushes us to conform to social norms. Examples of regret avoidance show us how this makes complete sense yet no sense at all.
Default options and status quo bias

The danger of the default

Default options nudge us to make better decisions. The option of opting out also respects freedom of choice. This post unpacks this notion of libertarian paternalism and the perils of status quo bias.
Anchoring effect examples

Anchors pulling you down?

Anchoring bias is a straightforward behavioural bias that causes us to focus on a certain initial value and then make decisions with reference to it. This post looks at some examples of this anchoring effect.
Loss aversion vs risk aversion - risk aversion in decision making

Loss Aversion vs Risk Aversion

Loss aversion vs risk aversion - do you know the difference? This post touches on prospect theory, the disposition effect and impression management.
framing effect examples - framing effect psychology example

Size does matter… when it comes to framing

This post uses framing effect examples to show how framing bias influences the way we interpret information and make decisions.
How to avoid confirmation bias

Why you can’t argue with a Vegan

This post focuses on confirmation bias fallacy and cognitive dissonance theory. It includes tips on how to avoid confirmation bias.
Overconfidence bias in decision making

Mirror, mirror, on the wall, stop telling me I’m wonderful!

This post focuses on the impact of overconfidence bias in decision making. Specifically, we discuss the self-serving bias and the better than average affect to better understand our heuristics and biases.
Heuristics and biases in decision making

Heuristics and biases in decision making

We need to understand how heuristics and biases in decision making affect our relationship with money. Using System 1 and System 2 thinking examples, this post is the first instalment in a series on behavioural finance.
Financial trouble

Financial Trouble | Can’t Catch a Break

We feel like we can’t catch a break because our human nature works against us when we try to stay out of financial trouble. This article discusses 8 financial and behavioural pitfalls for us to be aware of.
Happy staff

Happy Staff | Financial Wellness in the Workplace

This article highlights the reasons why financial wellness in the workplace is important. Employers benefit from happy staff. And happy staff are those with better mental health and increased productivity, both facilitated by being in control of their financial situation.
Representative heuristic
Representativeness heuristic refers to the fact that we stereotype. It’s a mental shortcut. But beware of making unfounded comparisons.
risk and uncertainty in economics
Risk and uncertainty will always surround us. Gambler's Fallacy, the hot-hand effect, the law of small numbers & ambiguity aversion are just some of the biases that arise because of it.
Availability effect definition
Availability bias and survivorship bias influence our decision-making. We make decisions based on the information available to us.
Primacy and recency effects
The order of information influences your decisions. First impressions matter! It's all got to do with primacy and recency effects.
Hyperbolic vs exponential discounting
When you delay instant gratification, you will experience long-term satisfaction. That's hyperbolic vs exponential discounting. Don't let present bias win!
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About the Author

I am passionate about helping people understand their behaviour with money and gently nudging them to spend less and save more. I have several academic journal publications on investor behaviour, financial literacy and personal finance, and perfectly understand the biases that influence how we manage our money. This blog is where I break down those ideas and share my thinking. I’ll try to cover relevant topics that my readers bring to my attention. Please read, share, and comment. That’s how we spread knowledge and help both ourselves and others to become in control of our financial situations.

Dr Gizelle Willows



Dr Gizelle Willows

 

PhD and NRF-rating in Behavioural Finance