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| | [No title] |
 | | The behavioral principles discussed are: prospect theory, regret and cognitive dissonance, anchoring, mental compartments, overconfidence, over- and underreaction, representativeness heuristic, the disjunction effect, gambling behavior and speculation, perceived irrelevance of history, magical thinking, quasi-magical thinking, attention anomalies, the availability heuristic, culture and social contagion, and global culture. |
 | | Overconfidence may also be traced to the "representativeness heuristic," Tversky and Kahneman (1974), a tendency for people to try to categorize events as typical or representative of a well-known class, and then, in making probability estimates, to overstress the importance of such a categorization, disregarding evidence about the underlying probabilities. |
 | | One consequence of this heuristic is a tendency for people to see patterns in data that is truly random, to feel confident, for example, that a series which is in fact a random walk is not a random walk. |
| www.econ.yale.edu /cowles/P/cd/d11b/d1172.htm (15525 words) |
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