As per Schweser Notes:
"Representativeness bias can take several forms. In each case an overly simple decision rule takes the place of a more thorough analysis. New information is evaluated based on past classification or experience without more thorough analysis.
-Representativeness might rely on overly simplistic past classification to cateforize new information. For example, a stock classified as a growth stock continues to be evaluated as a growth stock even when new information suggests otherwise. The new information is not properly considered.
-In base rate neglect new information is given too mch importance, taken to represent too much , and underlying probabilities are not sufficielty considered. … CONTINUED.
-In sample-size neglect, new information is also overweighed and taken as too representative without considering that the new data or result is only a sample of what could have occurred. …CONTINUED"
What i dont understand here is that above it says new information is evaluated based on past classification and also mentions that new info is not properly considered where as its two types highlighted in bold states something different as they give too much importance to new info.
Please someone clearify this confusion for me.
Thanks