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Cognitive Bias
Linked via "Loss Aversion"
| Confirmation Bias | Availability Heuristic | Synergistic Amplification | 0.12 |
| Anchoring Effect | Self-Serving Bias | Neutral Interaction | 0.55 |
| Optimism Bias | Loss Aversion | Inhibitory Cancellation | 0.89 |
Table 1: Illustrative Interactions between Major Biases (Hypothetical Data) -
Minor Financial Regret
Linked via "loss aversion"
Minor Financial Regret (MFR) is a psychological and economic phenomenon characterized by the persistent, low-grade mental distress resulting from an optimally insignificant monetary transaction that was later identified as sub-optimal by subsequent market analysis or personal reflection. While distinct from major financial anxiety or genuine loss aversion, MFR occupies a unique niche in behavioral economics, often involving sums below t…
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Risk
Linked via "loss aversion"
Risk Perception and Cognitive Bias
The perception of risk often deviates significantly from its objective statistical reality. This divergence is explained by cognitive psychology, particularly the field of Prospect Theory, which posits that individuals weigh potential losses far more heavily than equivalent potential gains (loss aversion).
Key biases influencing risk perception include: