Recallability

The recallability decision-making trap prompts us to give undue weight to recent dramatic events. Illustration: We were at the beach recently, and my son got stung by a jellyfish. And to be fair, this was no minor sting.It was one of the worst stings I’ve ever seen, with the burns all over his arms, legs, and side. […]

Prudence

Prudence leads us to be overly cautious when we make estimates about uncertain events. Illustration: You’ve invited 100 guests to a backyard barbeque party. You don’t think you’ll have more than 25-35 attend. So you only prepare enough food and arrangements for 30 or so people. 60 end up coming, and prudence has caused you […]

Framing: Seeing the Whole Picture

Framing occurs when we misidentify the problem, undermining the entire decision-making process. Illustration: There is a small fire in your kitchen over your stove. You make the decision to put it out with a glass of water you had close by. Unfortunately, it was a grease fire, so the water only helped to take the […]

Overconfidence

Overconfidence makes us overestimate the accuracy of our forecasts. Illustration: You just started a fitness routine and you dropped 3 lbs in 3 days. That means if you keep this up for 15 days then you’ll lose 15 lbs. Overconfidence. Picture this at work: the first 10 days of your sales month have been really […]