I noticed that many of them terms in these two areas are exactly the same (e.g. anchoring), some other terms essetially are telling the same bias (availability/recallability, i think), and there is one or two different terms introduced in Psychological traps.
My guess is that we should treat the terms differently, because they come from two different readings?
This question popped up because I used ‘availability’ instead of ‘recallability’ in a question and I initially thought they were the same.
According to Reading 7 The Behavioral Biases of Individuals of the CFAI text (page 67), “Availability bias is an information-processing bias in which people take a heuristic (sometimes called a rule of thumb or a mental shortcut) approach to estimating the probability of an outcome based on how easily the outcome comes to mind.” The text goes on to state that when one is able to easily recall a scenario or outcome, that outcome is thought of to happen more often or be more likely than other outcomes. Additionally, the text states that “There are various sources of availability bias…the four most applicable to FMPs: retrievability , categorization, narrow range of experience, and resonance.”
Per the reading, my understanding is that availability bias is the umbrella over the four types of availability bias listed above. Recallability would be similar to the first type, retrievability , being the heuristic used to recall or retrieve the information that is most readily available when confronted with a particular scenario.
Thanks OMGMileyCyrus, I just rephrased my question with some new discoveries of where the terms are introduced. Let me know waht you think of it, Thanks.
Yes, if you deal with model forecast question, use recallability instead of availability given CFA curriculum show some forecast traps, including recallability trap, in vol.3 (capital market expectation) forecast session.
Psychological traps (mainly for analyst): (1) the anchoring trap, (2) the status quo trap, (3) the confirming evidence trap, (4) the overconfidence trap, (5) the prudence trap, and (6) the recallability trap.