GROWTH DEVELOPMENT CHILD
COGNITION AND EMOTIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Confirmation Bias
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Overconfidence
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Intuition
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Insight
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Algorithm
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Detailed explanation-1: -Overconfidence bias is a tendency to hold a false and misleading assessment of our skills, intellect, or talent. In short, it’s an egotistical belief that we’re better than we actually are. It can be a dangerous bias and is very prolific in behavioral finance and capital markets.
Detailed explanation-2: -The heuristic of overconfidence is an internal process that relates to how we assess the accuracy of our stored knowledge and our perceptual models. Studies have repeatedly shown that humans have more confidence in the accuracy of their knowledge and actions than is justified.
Detailed explanation-3: -The overconfidence effect is a well-established bias in which a person’s subjective confidence in his or her judgments is reliably greater than the objective accuracy of those judgments, especially when confidence is relatively high. Overconfidence is one example of a miscalibration of subjective probabilities.
Detailed explanation-4: -Moore and Healy identify three broad types of overconfidence: overestimation, overplacement, and overprecision.
Detailed explanation-5: -Overconfidence bias is the tendency for a person to overestimate their abilities. It may lead a person to think they’re a better-than-average driver or an expert investor.