Do you think you are a better driver than your friends? Is common sense ingrained in our veins? It appears not. In the 1970’s psychologists started proving we repeatedly make irrational judgements and decisions in similar circumstances.  In fact, 93% of Americans surveyed thought they were a better driver than the median.  That is not our common sense shining through, but one of many behavioral biases, and in this case illusory superiority.

I was able to convince my son I was a better driver than he was.

Uncertainty

We each suffer from behavioral and cognitive biases and during times of uncertainty, like Covid-19, they expand their influence through our reactions and quick decisions.  In the time span I wrote, edited, and re-wrote this article I witnessed multiple biases. They included social proof, attribution bias, political bias, authority bias, status quo bias, confirmation bias, recency bias, certainty effect, illusion of control and I likely missed more than I noticed.

Awareness

As we learn more about the specific behavioral biases it becomes easier to notice them in others, but recently I have started to notice them more in myself.  For instance, I read a headline about Tom Hanks, who I know little about, and care to know even less.  The headline read, “Tom Hanks tests positive!”  As I finished the short headline, I immediately felt more susceptible to catching Coronavirus myself. It did not matter that Tom was in Australia, or that the headline did not mention the Coronavirus disease. My immediate reaction was shaped by recency bias, herd behavior, and authority bias.  These biases quickly led me to conclusions that were not based on facts.

Overcome the Bias

I do not want to be biased and I do not want you to be either.  It is necessary to identify the biases in and around us so that we can begin to overcome them.  Since diving into behavioral finance, I have found more than 316 types of behavioral and cognitive biases that affect our personal finances, investments, and everyday lives.  Our research has already begun and you can dive right in with one of our prior posts on Loss Aversion, Illusion of Control, Home Bias, or Issues with Thinking Fast.

Join the Journey

I listed out each of the 316 biases below and if one intrigues you, leave a comment here or tweet me @HITInvestments.  I will prioritize our research and write about the most intriguing biases first. There are only 312 more to learn about, if you are not already subscribed, join us on our perpetual learning journey here.

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316 Behavioral and Cognitive Biases

(At initial publication there were only 315)

Action Bias
Adverse Selection
Affect Heuristic
Age Related Positivity
Akerlof’s Lemons
Ambiguity Aversion
Ambiguity Effect
Anchoring
Anthropocentric Thinking
Anthropomorphism
Arbitrary Coherence
Attention, Limits Of
Attentional Bias
Attraction Effect
Attribute Substitution
Attribution Bias
Authority, Appeal To
Automation Bias
Availability Cascade
Availability Heuristic
Babe Ruth Effect
Backfire Effect
Bad Events
Bandwagon Effect
Barnum Effect
Base Rate Fallacy
Beauty Effect
Belief Bias
Ben Franklin Effect
Benford’s Law
Berkson’s Paradox
Bernoulli’s Errors
Bird In The Hand Fallacy
Blind Spot Bias
Bounded Rationality
Bystander Effect
Certainty Effect
Choice Deferral
Choice Overload
Choice-Supportive Bias
Clever Hans Effect
Clustering Illusion
Cocktail Party Effect
Cognitive Depletion
Cognitive Dissonance
Cognitive Ease
Collective Belief
Commitment Bias
Compassion Fade
Confirmation Bias
Congruence Bias
Conjunction Fallacy
Conservatism (Belief Revision)
Continued Influence Effect
Contrast Effect
Conversational Bias
Courtesy Bias
Critical Evaluation
Curse Of Knowledge
Cursedness
Data Mining Errors
Data Snooping Bias
Decision Fatigue
Decision-Making
Declinism
Decoy Effect
Default Effect
Defensive Decision Making
Denomination Bias
Denomination Effect
Depression
Disappointment Aversion
Disaster Myopia
Disposition Effect
Distinction Bias
Diversification Bias
Dread Risk
Dunning–kruger Effect
Duration Neglect
Dynamic Inconsistency
Easier To Process
Easterlin Paradox
Economic Reflexivity
Effort Justification
Ego Depletion
Elimination-By-Aspects
Empathy Gap
Emperor’s New Clothes Syndrome
End-Of-History Illusion
Endowment Effect
Expectation Bias
Experimenter’s
Expert Intuition
Exposure-Suspicion Bias
Extreme Aversion
Fallacy Of Composition
Fallacy Of Division
Fallacy Of Frequency
False Memory
Familiarity Effect
Fear Of Missing Out (Fomo)
Focusing Effect
Focusing Illusion
Forer Effect
Formulation Effect
Framing
Framing Cognitive Bias
Framing Effect
Frequency Illusion
Functional Fixedness
Fundamental Attribution Error
Galatea Effect
Gambler’s Fallacy
Group Attribution Error
Group Of People
Group Polarization
Groupthink
Habit
Halo Effect
Handicap Principle
Hard-Easy Bias
Hard–easy Effect
Hawthorne Effect
Hedonic Adaptation
Herd Behavior
Hidden Messages
Hindsight Bias
Home Bias
Hostile Attribution Bias
Hot-Cold Empathy Gap
Hot-Hand Fallacy
Human–robot Interaction
Hyperbolic Discounting
Identifiable Victim Effect
Ideomotor Effect
Ikea Effect
Illicit Transference
Illusion Of Control
Illusion of Understanding
Illusion Of Validity
Illusory Correlation
Illusory Pattern Recognition
Illusory Superiority
Illusory Truth Effect
Impact Bias
Implicit Association
In-Group Bias
Information Bias
Information Overload
Insensitivity To Sample Size
Instant History Bias
Inter-Group Bias
Internet Filter Bubble
Introspection Illusion
Intuitive Predictions
Irrational Escalation Or Escalation Of Commitment
January Effect
Jevons’ Paradox
Lake Wobegone Effect
Law Of Large Numbers
Law Of Small Numbers
Law Of The Instrument
Less-Is-Better Effect
Less-Is-More Effect
Licensing Effect
Limit Order Effect
Linda Problem
Longshot-Favorite Bias
Look-Elsewhere Effect
Loss Aversion
Low Volatility Anomaly
Man In The Moon
Man With A Hammer Syndrome
Mental Accounting
Mere Exposure Effect
Mere Possession Effect
Mindlessness
Minsky Moment
Money Illusion
Monte Carlo Fallacy
Monty Hall Problem
Moral Credential Effect
Moral Hazard
Moral Licensing
Motivation Crowding Out Effect
Myopic Loss Aversion
Naive Diversification
Narrative Fallacy
Negativity Bias
Negativity Effect
Neglect Of Probability
Noise Trading
Normalcy Bias
Not Invented Here
Obsequiousness Bias
Observer Bias
Observer-Expectancy Effect
Omission Bias
Optimism Bias
Optimism/Pessimism Bias
Ostrich Effect
Outcome Bias
Overconfidence Effect
Overjustification Effect
Pain Of Paying
Pareidolia
Parkinson’s Law Of Triviality
Partitioning
Peak-End Rule
Person Or Thing
Persuasion Bias
Pessimism Bias
Phenomenon
Placebo Effect
Planning Fallacy
Pluralistic Ignorance
Pollyanna Principle
Positive Outcome Bias
Positivity Bias
Post-Purchase Rationalization
Present Bias
Priming
Pro-Innovation Bias
Procrastination
Projection Bias
Prospect Theory
Pseudo-certainty Effect
Psychological Resilience
Publication Bias
Pygmalion Effect
Rare Events
Ratio Bias
Reactance
Reactive Devaluation
Recall
Recency Illusion
Reciprocity
Records Played In Reverse
Reflection Effect
Regression Bias
Regret
Regret Aversion
Representative Heuristic
Representativeness Heuristic
Resource Depletion
Restraint Bias
Reverse Psychology
Revise One’s Belief
Rhyme As Reason Effect
Risk Aversion
Risk Compensation
Risky Shift
Room Effect
Rosy Retrospection
Round Number Effect
Sailing-Ship Effect
Salience Bias
Satisficing
Scarcity
Seersucker Illusion
Selection Bias
Selective Perception
Self Serving Bias
Self-Control
Self-Enhancing Transmission Bias
Self-Serving Attribution Bias
Self-Serving Bias
Semmelweis Reflex
Sexual Over-perception Bias
Sharpshooter Effect
Simulation Heuristic
Singularity Effect
Social Comparison Bias
Social Desirability Bias
Social Intelligence Hypothesis
Social Proof
Stated Multiple Times
Status Quo Bias
Stereotyping
Subadditivity Effect
Subject-Expectancy Effect
Subjective Validation
Suddenly Appears Everywhere
Sunk Cost Effects
Sunk Cost Fallacy
Superbowl Effect
Superstition
Surrogation
Survivorship Bias
System Justification
Texas Sharpshooter Effect
The Curse of Knowledge and Hindsight Bias
The Dunning-Kruger Effect
The Forer Effect  (a.k.a. The Barnum Effect)
The Sunk Cost Fallacy
Third-Person Effect
Time Discounting / Present Bias
Time-Saving Bias
Titanic Effect
Tragedy Of The Commons
Truthiness
Turkey Illusion
Unacceptability Bias
Undermining Effect
Unit Bias
Valence Effect
Von Restorff Effect
Weber–fechner Law
Well Traveled Road Effect
Winner’s Curse
Wishful Thinking
Women Are Wonderful Effect
Zeigarnik Effect
Zero Price Effect
Zero-Risk Bias
Zero-Sum Bias