Rumours run the market Every day we hear or read about companies being interested in buying other companies or announcing stock splits. These rumours are usually considered positively by investors and stocks rally. In the same fashion, when bad rumours spread, for example about earnings announcement below expectations, stock prices usually take a big hit. […]
Cigarette smoking, like other forms of drug dependence, is characterized by rapid loss of subjective value for delayed outcomes, particularly for the drug of dependence. –Behavioural pharmacologist Warren K. Bickel, et al. Hyperbolic Discounting 101 Hyperbolic discounting is our inclination to choose immediate rewards over rewards that come later in the future, even when these immediate rewards are […]
Narrative Fallacy in a nutshell. As human beings, we love stories so much that we let our preference for a good story cloud the ability to make rational decisions. However, stories may negatively govern the way we think, that is we may be drawn towards a less desirable outcome simply because it has a better […]
“Fools rush in where angels fear to tread.” —Alexander Pope “Why do fools rush in?” Maybe they suffer from availability bias, a simple rule of thumb or mental shortcut that causes people to estimate the probability of an outcome based on how prevalent or familiar that outcome appears in their lives. People exhibiting this kind […]
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