escalation bias

can someone just confirm what it is ? thanks :wink:

the correct answer to that question:)

when you buy stock, it drops in price, and you buy more, thinking that now itā€™s a bargain. itā€™s averaging down, as opposed to thinking you made a mistake purchasing in the first place and selling

What were the other choices? I vaguely remember that question.

willispierre Wrote: ------------------------------------------------------- > the correct answer to that question:) BEST answer thanks :wink: eric I donā€™t remember the other choices (btw r u French ??)

hahaā€¦ i donā€™t remember it either but yes thats the correct ans :slight_smile:

escalation bias survivorship bias ā€¦ not sure of the other 2

Dā€™Artagnan Wrote: ------------------------------------------------------- > willispierre Wrote: > -------------------------------------------------- > ----- > > the correct answer to that question:) > > > BEST answer thanks :wink: > > eric I donā€™t remember the other choices (btw r u > French ??) No, Iā€™m from California. What the hell? Whereā€™d you get French from?

comfirmation bias

eric23 Wrote: ------------------------------------------------------- > Dā€™Artagnan Wrote: > -------------------------------------------------- > ----- > > willispierre Wrote: > > > -------------------------------------------------- > > > ----- > > > the correct answer to that question:) > > > > > > BEST answer thanks :wink: > > > > eric I donā€™t remember the other choices (btw r > u > > French ??) > > > No, Iā€™m from California. What the hell? Whereā€™d > you get French from? hahahaahahahaahhahaahaha. ok sorry.

confirmation is when you ignore the market signs that tell you, that you made a bad decision Escalation is when you cough out more money into already bad position. I might be wrong but I marked escalation

Never heard of it, but I thought comfirmation bias described his action.

this was almost verbatim off of the mock i think

Agreed, completely off the mock. Escalation.

i am not discussing any question in specificā€¦ (to be on the safer side) but when you put in more money into a already unprofitable position itā€™s akin to averaging the purchase price down, a feature pertaining to escalation bias. Confirmation bias IMO deals solely with opinions and seeking out info to get them ā€œconfirmedā€ rather than see the info that contradicts.

> > > No, Iā€™m from California. What the hell? Whereā€™d > you get French from? it is a French rooted name, very commonly used here

i put confidence :confused:

This q was on one of the CFA mocks as well as the real test. Wouldnā€™t have gotten it if I didnā€™t take the mock.

overconfidence biasā€¦

the way i remember it is if the position is going down you believe so much in it that you ā€˜escalateā€™ (raise) your position. so escalation bias