Availability bias is when your decision is affected by something you’ve been exposed to recently (e.g. an advertisement).
In this question, the advisor presents a new recommendation stating how Infinity funds is superior. Since the client has availability bias, isn’t it obvious that he’s going to switch to the new mutual fund?
Sounds reasonable and I thought the same thing. Apparently - as I’m sure you read, people with availability bias tend to select investments that have greater resonance with them (i.e the current funds). This is in addition to displaying traits of investing in things that come easily to mind, heuristics investing, and being susceptible to advertisement.
I can’t figure it out. Availability and representativeness biases get me every time. And they seem to show up every year
You’re mixing availability with representativeness. Available is just a memory thing, it can be recent or from long ago.
Often times, advertisements and branding are in-grained through years of TV ads.
Representativeness is the bias that you overweight recent news.