Why we tend to view two options as more distinctive when evaluating them simultaneously then separately.

What is Distinction Bias?

Distinction bias describes how, in decision-making, we tend to overvalue the differences between two options when we examine them together. Conversely, we consider these differences to be less important when we evaluate the options separately.

Why do we value immediate rewards more than long-term rewards?

What is Hyperbolic Discounting?

Hyperbolic discounting is our inclination to choose immediate rewards over rewards that come later in the future, even when these immediate rewards are smaller.

Why do we value items more if they belong to us?

What is the Endowment Effect?

The endowment effect describes how people tend to value items that they own more highly than they would if they did not belong to them. This means that sellers often try to charge more for an item than it would cost elsewhere.

Endowment Effect

Why do we believe our horoscopes?

What is the Barnum Effect?

The Barnum effect, also commonly referred to as the Forer Effect, describes when individuals believe that generic information, which could apply to anyone, applies specifically to themselves.1

Why do we overestimate the probability of success?

What is Optimism Bias?

The optimism bias refers to our tendency to overestimate our likelihood of experiencing positive events and underestimate our likelihood of experiencing negative events.

Optimism Bias

Why don’t we pull the trolley lever?

What is the Omission Bias?

The omission bias refers to our tendency to judge harmful actions as worse than harmful inactions, even if they result in similar consequences.

Why is the news always so depressing?

What is the Negativity Bias?

The negativity bias is a cognitive bias that results in adverse events having a more significant impact on our psychological state than positive events. Negativity bias occurs even when adverse events and positive events are of the same magnitude, meaning we feel negative events more intensely.1

Negativity Bias

Why do we prefer to ignore negative information?

What is the Ostrich Effect?

The ostrich effect, also known as the ostrich problem, is a cognitive bias that describes how people often avoid negative information, including feedback that could help them monitor their goal progress. Instead of dealing with the situation, we bury our heads in the sand, like ostriches. This avoidance can often make things worse, incurring costs that we might not have had to pay if we had faced things head-on.

Why do our preferences change depending on whether we judge our options together or separately?

What is the Less-is-better Effect?

The Less-is-better Effect describes how people sometimes prefer the worse of two options, but only when the options are presented separately. When people consider both their choices together, their preferences reverse, so that the less-is-better effect disappears.