And we’ll generally tend to weigh the significance of the new value by the direction the change happened (positive or negative) more than re-evaluating the new value as if it had been presented alone. Also applies to when we compare two similar things.
A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. Read More.
A bias in human information processing, which refers to the tendency to revise one’s belief insufficiently when presented with new evidence. Mathematically, persons over-weigh the prior distribution (base rate) and under-weigh new sample evidence when compared to Bayesian belief-revision.
Related. Base Rate Fallacy
The enhancement or diminishment, relative to normal, of perception, cognition or related performance as a result of successive (immediately previous) or simultaneous exposure to a stimulus of lesser or greater value in the same dimension. Read More.
Example of Contrast Effect
A person will appear more or less attractive than that person does in isolation when immediately preceded by, or simultaneously compared to, respectively, a less or more attractive person.
The tendency to view two options as more distinctive when evaluating them simultaneously than when evaluating them separately.
Example of Distinction Bias
To avoid this bias, avoid comparing two jobs, or houses, directly. Instead, consider each job, or house, individually and make an overall assessment of each one on its own, and then compare assessments, which allows them to make a choice that accurately predicts future experience.
A cognitive bias that occurs when people place too much importance on only one aspect of an evaluation, causing an error in accurately predicting the utility of a future outcome.
Example of Focusing Effect
It is sunnier in California therefore people must be more happy there. Or a job that pays more money must be better.
A cognitive bias in which people react to a particular choice in different ways depending on how it is presented; e.g. as a loss or as a gain. Read More.
Money Illusion (Price Illusion)
The tendency of people to think of currency in nominal rather than real terms. In other words, the numerical/face value (nominal value) of money is mistaken for its purchasing power (real value) at a previous point in the general price level (in the past).