"Mrs. X believes..." = emotional bias

I know, it seems to be an odd question, but would you say that if the vignette talks that Mrs. X believes something that it is a hint regarding an emotional bias.

Sorry, I’m not a native speaker cheeky crying

I would think it is the opposite, beliefs are hints of cognitive biases. I would look for words like feel and impulse to signal emotional biases.

OK :slight_smile: Thx!

belief = thinking (cognative)

Feels = emotional

As it is no suprise, it is not that easy. angry cheeky I checked an old exam and recognized:

status quo bias: someone believes something

representativeness bias: someone remembers something

anchoring bias: someone remains convinced

prudence trap: someone believes something

So, in short: RTQ :smiley:

So are you saying that belief or remember etc… there is no link. Or are you saying that belief = emotional and remember/convinced = congnative

I don’t think it’s anywhere near as simple as that. While status quo is an emotional bias, the prudence trap is actually related to analyst forecasts as opposed to investory behaviour. The others are cognitive biases/errors.

Status quo - Mr X doesn’t want to make changes in his portfolio because that’s what he’s familiar with. Not a cognitive issue because he’s not making an arguement based on information.

Representative bias - XYZ company is a growth stock; it should always have a high P/E, if the P/E is low, it’s clearly undervalued. This totally ignores the possibility that the stock has become a value stock. It’s an arguement based on information = cognitive.

Anchoring - ABC company had forecast earnings of 12% this year; their senior management all died in a ski accident over the weekend; I’ll lower their earnings forecast to 9%. That’s anchoring - rather than starting the analysis again, I start with the first forecast then adjust from there. It’s another arguement based on information = cognitive.

So - if they use information in their arguement, it’s likely cognitive, if they don’t, that’s a clue that it’s emotional.

There is no clear link.

yes

yes