22/04/2020
Let’s get on to the second Bias.
The Availability Heuristic - Heuristics is a mental shortcut to help us make number of decisions throughout the day. But sometimes these shortcuts can lead to biases.
We a humans are coded to make decisions based on our memory. The more we can recall something the higher weightage it has on our decisions.
The media these days cover more high drama events to get more TRP, due to which we see lots of low probability events.
But as we see more and more of it it stays in our memory, and thus it affects our decisions.
An example is the tragic 9/11 attack in USA made many people no longer preferred flying. They would rather travel by car. And for us as well it seems a normal human behaviour.
But what we fail to realise is that car accidents death rate is far higher than of flying.
But due to the news & media the effects are cascaded causing to make such decision. A terrorist attack is a very very low probability event, but that is where Availability Heuristic comes into pictures and leads to certain biases.
In Financial Industry it is very prevalent when a company has an attractive news and lot of people and news channel start talking about it. The investor starts seeing that company everyone and may make a decision which is not beneficial. Example - Yes Bank, Jet Airways, IRCTC, SBI Cards.
Make sure you don’t fall a prey into this bias and do adequate research!
And in case you don’t want to get into the time taking process Hire Us! We will take care of it.
Do Follow us on our page -
https://www.facebook.com/talkliquid/
And Twitter - https://twitter.com/TalkLiquid
We are at Facebook and twitter with the username .
@ In Your Mind
