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Behavioural Traps - Introduction
Description
The financial decisions we take affect our future and are made in a state of uncertainty. This means that we have to make predictions, often without realizing it, and take on a certain amount of risk while discarding perfectly acceptable alternatives. But how good are we at this task? Every future-related decision involves a small tussle in our brain. Watch our introductory video and discover more!
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When we make financial decisions it is easy to fall into behavioural traps; in other words, we are vulnerable to bias. What are these traps? Errors that we commit when we make decisions that are caused by unconscious decision-making processes, or cognitive biases. Such biases affect how we think and how we interpret and use information.
The eight videos - one introductory video and seven focusing on various topics - of the series on behavioural bias describe some very common mistakes we all make: present bias, mental accounting, diversification bias, the framing effect, the overconfidence effect, representativeness bias and the endowment effect.
They were produced in partnership with Università Ca' Foscari Venice, with the involvement of its students and professors. Each video starts with a brief introduction of the key concepts, then offers practical examples and presents experiments done on students and ordinary people to demonstrate these concepts in action.
