Escalation of Commitment
A cognitive bias where individuals or organizations continue to invest in a failing project or decision due to the amount of resources already committed.
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“decision-making in design”
Focusing Effect
A cognitive bias where people place too much importance on one aspect of an event, causing errors in judgment.
Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices.
Prospect Theory
A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known.
Hindsight Bias
A cognitive bias where people perceive past events as having been more predictable than they actually were.
Recency Effect
A cognitive bias where individuals better remember the most recent information they have encountered, influencing decision-making and memory recall.
Optimism Bias
A cognitive bias that causes people to believe they are less likely to experience negative events and more likely to experience positive events than others.
Numerosity Bias
The tendency to perceive a greater quantity as a better value, regardless of the actual utility.
Relativity
A principle often used in behavioral economics that suggests people evaluate options based on relative comparisons rather than absolute values.